Take advantage of EV tax credits and rebates
The federal tax credit
The federal tax credit on EV purchases is subject to a number of variables. Yes, you could get the maximum $7,500, but only if you check all the boxes.
First, the potential credit depends on the manufacturer. The 2010 legislation that enacted federal EV tax credits states that after a manufacturer sells its first 200,000 EVs the credit gets cut in half, and then tapers to zero over the following year. Thus Teslas and Chevy Bolts no longer qualify for any federal tax credit.
The credit on a Nissan Leaf is still $7,500 for the time being, but it will go down to $3,750 soon. The other qualifying models featured in our 2020 Sales EVent – the Audi e-tron, Kia Niro and Honda Clarity – all remain at $7,500. (Note: Honda’s CRV Hybrid doesn’t qualify for any credit because you can’t plug it in.)
In the case of leased vehicles, the tax credit goes to the leasing company. Still, that should enable the dealer to offer a correspondingly lower monthly payment.
Second, the tax credit is less for certain models with smaller batteries – for example, many plug-in hybrids. (That doesn't apply to any of the vehicles in this EV Sales EVent.)
Third – and very importantly – the amount of federal tax credit you get will depend on your federal income tax liability. You can claim a credit for no more than the amount of tax you owe, and the credit can be used only for the tax year in which the purchase is made.
Example 1: Jane Doe buys an EV that qualifies for a $7,500 credit. Her federal tax owed for the year of purchase (including employer withholdings and self-employment pre-payments) is $5,000. Jane will receive a $5,000 refund.
Example 2: Mary Buck buys an EV that qualifies for a $7,500 credit. Her federal tax owed for the year of purchase (including employer withholdings and self-employment pre-payments) is $20,000. Jane will receive a $7,500 refund.
Colorado's tax credit
Colorado's "Innovative Motor Vehicle" income tax credit is a flat $2,500 for the purchase of any plug-in hybrid or all-electric passenger vehicle, or $1,500 for a leased vehicle. For light-duty electric trucks (8,500-10,000 lbs. GVWR), those numbers are $3,500/$1,750, and for medium duty electric trucks (10,000-26,000 lbs.) they're $5,000/$2,500. The state tax credits are scheduled to be reduced somewhat in 2023, and phase out altogether after 2025.
One of the great things about the state credit is that it's fully refundable. That means you get the full credit no matter what your state tax bill is. If you owe, say, $1,000 in state income tax for 2021, and you purchased an EV in that year, you'll instead get a $1,500 refund.
The other great thing about the state credit is it's assignable. In 2016, legislators passed HB 1332, which allows vehicle buyers to assign the "Innovative Motor Vehicle" income tax credit to a financing entity at the time a new electric vehicle is leased, or purchased using financing.
Ask your dealer if its financing entity has signed up with the Colorado Department of Revenue. If it has, and if you chose to lease the vehicle or purchase with dealer financing, the dealer can offer the tax credit at the time of sale. Buyers don't have to wait to file their taxes the following year to benefit from the state tax credit.
Banks or credit unions providing auto loans can also offer the assigned tax credit, if they have signed up with the Colorado Department of Revenue.
The dealership's financing entity, bank or credit union will ask the buyer or lessee to sign a Colorado Department of Revenue “Election Statement” form, DR 618, to document the transaction at the time of purchase.
The financing entity may collect a fee of up to $150 from the buyer's tax credit to cover its administrative costs for processing the assignment.
Xcel announces amazing rebates for income-qualified customers
Xcel Energy electric customers who meet income qualifications can now score some amazing rebates on EVs. Xcel will pay up to $5,500 toward a new EV, and up to $3,000 for a used one - plus, you can get up to $1,400 back on the cost of installing a home charger.
Many people will qualify for these rebates, because they're available to anyone earning 80% or less of the median income for their county. For example, a family of four in Garfield County will qualify if they earn no more than $70,640. See Xcel Energy's website for program details and application form.
Holy Cross customers can get a free Level 2 home charger
- Holy Cross is offering its customers a ChargePoint Home Level 2 EV charger (up to two chargers if you have two EVs).
- You hire the electrician to install the charger.
- You can either pay your electrician for the installation, or have HCE cover your upfront costs and spread it over 3 years on your electric bill.
- You have 60 days to install and activate your charger from the date you pick up the charger.
Go Green with Alpine Bank
Make your drive time greener by purchasing a more fuel-efficient vehicle. Choose any of the EV Sales Event discount vehicles and Alpine Bank will take 1/2 percent off your loan interest when you qualify for a loan. More details here.