Businesses installing charging stations or other new fuel options may qualify for tax credits.
The Alternative Fuel Vehicle Refueling Property Credit, outlined in Section 30C of the Internal Revenue Code, plays a pivotal role in incentivizing the installation of refueling infrastructure for alternative fuel vehicles (AFVs) across the United States. This federal tax credit encourages businesses and individuals to invest in qualifying refueling stations that support a range of alternative fuels, including natural gas, hydrogen, electricity, and more.
The credit amounts up to 30% of eligible installation costs, subject to specific limitations. Businesses can claim up to $100,000 per charger, while residential installations have a $1,000 limit. The credit is applicable to various types of refueling infrastructure, such as electric vehicle charging stations, hydrogen dispensing stations and natural gas vehicle refueling stations. Eligible taxpayers, both businesses and individuals, should keep detailed records of installation costs to support their claims.
On Jan. 19, 2024, the Internal Revenue Service (IRS) issued updated guidance for the Alternative Fuel Vehicle Refueling Property Credit, with a specific focus on geographic eligibility requirements. To qualify, individuals and businesses must be located in an “eligible census tract,” a term defined by the IRS as “any population census tract that qualifies as a low-income community or that is not an urban area.” According to a statement issued by the White House, the identification of these eligible census tracts is strategically designed to extend the accessibility of the charging tax credit to approximately two-thirds of Americans.
Learn more about the Alternative Fuel Vehicle Refueling Property Credit.