How to Get the Electric Car Tax Credit

Right now is a great time to take advantage of the new electric car tax credit being offered. Those folks who buy a new car in 2010 can get an electric car tax break if their car meets certain parameters of qualification. This electric car tax deduction is nice, because it is a dollar for dollar tax break, so you can save a lot of money when you make a responsible choice. Not every person who gets a new electric car is going to get the $7,500 tax credit for the electric car. You have to make sure you have the right car and purchase it from the right manufacturer.

There are many things you will have to think about if you want to get the electric car tax credit. The first of those is making sure the vehicle meets the qualifications. In order to qualify for the electric car tax break in 2010, it has to be a newly purchased car. This means you have to have made the purchase after December 31, 2009 in order to get the break. Though buying in the new year is the first part of the qualification, it is not the last. You also have to make sure you buy within the year, because the credit will start to phase out in 2011. In addition, once a certain manufacturer has sold 200,000 of any type of electric vehicle, the credit will be reduced for new buyers. That made immediacy a concern if you want to get the electric car tax deduction.

In addition to just buying at the right time, there are specific qualifications. It must have four wheels and come in under 14,000 pounds. Those things are important, because the entire idea behind the tax credit was to help people make good choices when it comes to their actual vehicles. In addition, the electric car must be the kind that draws its power from an external source. Its battery must be able to hold a charge for at least four hours. When the kilowatt battery runs out, the electric car must be the type that can be plugged in to an external source for more energy. This is an important consideration and you have to meet all of the qualifications.

The total amount of the electric car tax credit, at least in the first year, can be as much as $7,500, depending upon the price of the car and how much energy it consumes. The tax credit can not drop below $2,500 in any circumstance, which means that people making this electric car purchase in the coming year will be guaranteed of a nice bit of savings. Unlike some deductions, this credit is a dollar for dollar measure, so people get much more bang for their buck in regards to their tax returns.

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Source: m.carsdirect.com

Category: Credit

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