Your Guide to Available EV Charging Station Tax Credits
Installing electric vehicle (EV) charging stations on your property can benefit your business in many ways — from attracting customers to luring top talent. And thanks to a variety of tax credits and incentive programs, the barrier to entry may be lower than you think.
On the federal, state and local levels, there are a plethora of tax credits and incentives for installing electric vehicle charging stations. Chances are, your business can qualify for significant incentives to help you take the leap toward offering EV charging on your property. Read on for everything you need to know about how these tax credits and incentives work, plus what you have to do to get them (and why it’s worth installing more than just one).
How Do Business Tax Credits for EV Charging Stations Work?
Most consumers are aware of tax credits for individual electric vehicle purchases, but many business owners may not be aware of similar (and larger) credits for electric vehicle supply equipment (EVSE) and public EV charging stations. These tax credits are designed to support the expansion of charging station infrastructure and remove a major barrier to EV ownership by making refueling accessible everywhere. They include incentives for installing EV charging stations.
Tax credits for installing EV charging stations are available in a variety of forms, and many of them apply toward the cost of equipment and installation. Given that the latter can be the most significant expense, that means these credits can add up to significant savings. They usually come in the form of a tax rebate to reduce your business’s tax bill, but they may come in other forms (as we’ll discuss later).
Some type of incentive program is available in 44 states and Washington, D.C., on top of the federal program that’s offered everywhere in the US. In most cases, that means all you have to do to qualify is install charging equipment on your business’s property and submit an application for credit.
What is the Alternative Fuel Vehicle Refueling Property Credit for EV Charging?
The federal alternative fuel vehicle (AFV) refueling property credit is the largest tax credit available to businesses for installing EV charging stations. It applies to installs dating back to January 1, 2023, and has been extended through December 31, 2032. The AFV refueling property credit covers 30% of the cost for commercial EV charging equipment and installation, up to $100,000. If your business has multiple locations, you can apply this credit toward an installation at each one.
Depending on the type of labor used on your EV charging project, your business may be eligible for:
30% of the costs, up to $100,000 per item, if the installation meets U.S. Department of Labor prevailing wage and apprenticeship requirements, OR
6% of the costs, up to $100,000 per item, if prevailing wage and apprenticeship requirements are not met.
On top of that federal tax credit, there are many more EV charging incentives offered through state governments and local utility companies.
Massachusetts, for instance, offers its MassEVIP Workplace and Fleet Charging program, which covers 60% of the costs of EV charging equipment and installation for up to $50,000 per business address.
Commercial EV Charging Tax Credit FAQs
Curious for more information about these programs? Here are some answers to a few common questions.
How do I apply for a business tax credit for installing EV charging stations?
For the federal EV charging station tax credit, you’ll need to submit IRS Form 8911 when you file your business taxes. This form walks you through reporting your expenses for the project and calculating your credit.
For businesses as well as applicable entities, including state, local, tribal and other qualifying tax-exempt organizations, the credit for each item of property is the lesser of 6% (or 30% if certain prevailing wage and apprenticeship requirements are met) of the property’s cost or $100,000.
Similar forms or applications are required for state and local programs. If your utility company offers a rebate program, you will typically need to apply directly to receive credits or rebates against your utility bills.
Do I have to install a minimum number of EV charging stations to qualify for tax credits?
No, there is usually not a minimum requirement for the number of EV charging stations you have to install — most programs offer at least a small credit for each Level 2 station. There may, however, be a minimum business size required to qualify. In Massachusetts, for instance, your business must have at least 15 employees.
Keep in mind that there are good reasons to consider installing more charging stations even if you don’t have to do it to meet a minimum. It’s unclear how long many of these programs will last, so now is the best time to take advantage of them. The more you invest into your EV charging infrastructure now, the more you future-proof your business to meet tomorrow’s demands.
Do EV charging station tax credits vary depending on the type of business?
No, the only requirements for businesses relate to size, location, and type of labor used for the installation. You’ll need to check and make sure you meet the requirement for a minimum number of employees and that your business qualifies as commercial and not residential.
Many areas offer credits for residential customers as well. Review the options and requirements in your area before you begin installing your EV charging equipment.
Get Help Finding Business Tax Credits and Incentives for EV Charging
The transition to an all-electric future is fully in motion, and businesses that want to be ready for that future should be on the leading edge of change. Installing electric vehicle charging stations at your business signals that you’re serious about leading the way. It will certainly pay off in the long run, and it doesn’t need to cause crippling expenses up front.
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Sources
The Environmental Center - 4 things you need to know about the EV Charging Tax Credit
U.S. Department of Energy - Alternative Fuel Infrastructure Tax Credit
Mass.gov - Apply for MassEVIP Workplace & Fleet Charging Incentives
Washington State Department of Revenue - Clean alternative fuel commercial vehicles and vehicle infrastructure tax credits expanded