The new Alternative Fuel Refueling Property tax credit extends the EV charger tax incentive ten years—through Dec. 31, 2032.
Essentially, if you install a home EV charging station, the tax credit under the Inflation Reduction Act is 30 percent of the cost of hardware and installation, up to $1,000. Also, beginning in 2023, the tax credit for business and home installations, will apply to other EV charging equipment like bidirectional (i.e., two-way) chargers.
Businesses that install new EV chargers or EV charging equipment can also benefit from a tax incentive of up to 30 percent of the total cost of equipment and installation. But they will have to meet certain labor and construction requirements to be eligible to claim the full incentive.
Before the Inflation Reduction Act, the limit on the amount of the EV charger tax credit for businesses was $30,000 (which still applies to projects completed before the end of 2022). However, under the new law, if you complete the business installation project after 2022, the tax credit per property item is up to $100,000 per EV charger.
All of this means that while electric vehicle chargers are not entirely tax deductible, you might benefit, to some degree, from the tax incentives in the Inflation Reduction Act that apply for refueling property.
The EV charger tax credit is revived just as president Biden on Sept. 14 announced a $900 billion EV charging station investment plan. The plan, which also comes as the Inflation Reduction Act provides tax incentives for new and used electric vehicles, is to build 100 million EV charging stations in 35 states. The Biden administration has indicated that the approved investment will span 53,000 miles of national highway.
(Kelley R. Taylor is tax editor at Kiplinger.com. For more on this and similar money topics, visit Kiplinger.com.)
