How Your Vehicle Can Earn You a Tax Credit

When you think of buying a car, you probably think about how much money it’s going to cost you. If you’re smart, though, your car purchase could actually end up saving you money in the long-run.  

When you choose to buy a vehicle that runs on electricity via a plug-in rechargeable battery, you are more than likely eligible for what is known as the qualified plug-in electric drive motor vehicle tax credit. If you do qualify for this credit, you can take advantage of it by filing form 8936.

Make Sure You Qualify

Qualifying for this great tax credit is exciting, but be aware that the requirements that must be met in order to qualify are pretty stringent. For this reason, most people find it helpful to have a tax professional assist them with determining their eligibility status, which isn’t a bad idea.

A few of the requirements that must be met include:

·         The vehicle must have been purchased after December 31, 2009

·         The purchased vehicle must be new, not used

·         The purchased vehicle must be made by a manufacturer that followed the guidelines of the Clean Air Act

·         The vehicle must have at least four wheels

·         The vehicle must have a weight rating under 14,000 pounds

·         The vehicle must be eligible to be driven on public streets/highways

·         The vehicle must have an electric motor that uses a rechargeable battery for at least four hours of capacity. 

        Once you have selected a qualifying vehicle, you can get a certificate showing the vehicle meets all requirements from the vehicle manufacturer, and, from there, it’s just a matter of filing the right paperwork and claiming your credit!

As you can see, those requirements are pretty strict so if you want to ensure that you meet them all or that a vehicle you are thinking of buying does, don’t hesitate to turn to a tax professional for help with the process.