Tax Breaks for Green Vehicles

CPAs & Advisors

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If you opt to purchase one of these energy-efficient vehicles, you can qualify for a federal income tax credit in 2015 and 2016:

Fuel cell vehicles. You can claim a credit for a qualifying vehicle that’s propelled by chemically combining oxygen with hydrogen to create electricity. This credit expired at the end of 2014, but the PATH Act extended it to cover qualifying vehicles purchased in 2015 and 2016.

The base credit is $4,000 for vehicles weighing 8,500 pounds or less. Heavier vehicles can qualify for credits of up to $40,000. An additional credit of between $1,000 and $4,000 is available for cars and light trucks that meet specified fuel economy standards.

Two-wheeled, plug-in electric vehicles. You can claim a 10% credit for buying a qualifying electric-powered, two-wheeled vehicle that’s manufactured primarily for use on public roads and capable of going at least 45 miles per hour (in other words, an electric-powered motorcycle). The maximum credit is $2,500. This credit had previously expired, but it was restored by the PATH Act for qualifying vehicles acquired in 2015 and 2016.

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