By Mark Hodges, CPA, Tax Senior Associate | Family, Executive & Entrepreneur Advisory Services Team
Have you recently installed a charging station for an electric or clean-energy vehicle at your principal residence or business?
If so, we have good news for you. The year-end appropriations act passed by Congress late in 2019 has retroactively extended the in-service date of new property eligible for the Qualified Alternative Fuel Vehicle Refueling (QAFVR) credit to January 1, 2021.
Subject to limitations and eligibility requirements, the credit is equal to 30 percent of the cost incurred to place the qualifying alternative fuel vehicle refueling property in service. For individuals utilizing the charging station for personal use, the maximum credit available is capped at 1,000 dollars. For businesses providing the charging station for patrons or residents, the limitation is capped at 30,000 dollars. For businesses looking to take advantage of this credit, take note that the depreciable basis of your charging station will be reduced by the amount of credit you claim. Individuals and pass-through entities may claim the QAFVR credit on Form 8911.
QAFVR Credit Eligible Refueling Sources
As the intent of the credit is to incentivize the use of clean-fuels, the legislation defines eligible refueling sources as any of the following three categories:
- Any fuel with at least 85 percent of the volume consisting of one or more of the following:
- Natural gas
- Compressed natural gas
- Liquefied natural gas
- Liquefied petroleum gas
- Any mixture that:
- Consists of two or more of the following: Biodiesel, diesel, or kerosene – AND –
- At least 20 percent of the volume of which consists of biodiesel determined without regard to any kerosene in such mixture
Note: The legislation retroactively applies to property placed in service during 2018. Before this extender, the QAFVR credit had expired for property placed in service after 2017. Some taxpayers may benefit from amending their 2018 return to claim the QAFVR credit…especially if the charging station was placed in service by a business that is treating the refueling property as depreciable property (due to the higher 30,000 dollar credit limitation).
Additional Tax Resources
- Tax Extenders Deal Renewing Expired Tax Breaks Through 2020 Approved
- Individual Tax Provisions Extended by the Taxpayer Certainty and Disaster Relief Act
- IRA and Retirement Plan Changes in the 2019 Budget Act
- 2019/2020 Tax Planning Guide
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.