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IRS Issues Guidance on Electric Vehicle Charging Station Tax Credits

S.J. Steinhardt
Published Date:
Jan 22, 2024

The IRSand the Department of the Treasury have issued guidance on tax incentives for installing electric vehicle charging stations and other alternative fuel refueling stations, and where these stations can be located in order to qualify for the credit.

The Inflation Reduction Act (IRA) amended the credit for qualified alternative fuel vehicle refueling property. The changes apply to qualified alternative fuel vehicle refueling property placed in service after Dec. 31, 2022 and before Jan. 1, 2033. The forthcoming regulations will address the requirements for determining in which population census tracts these properties are to be placed in service in order to be eligible for the alternative fuel vehicle refueling property credit under the IRA.

Under the proposed regulations, an eligible census tract is any population census tract that is a low-income community or any population census tract that is not an urban area. Eligible census tracts are listed in Appendix A and Appendix B to the guidance.

The information can help households, businesses and other organizations considering such investments find out whether they're eligible for a tax credit of up to 30 percent for installing Electric vehicle charging stations, according to Accounting Today.

The Department of Energy also released a mapping tool to help households, businesses and other organizations considering those investments to find out whether they may be eligible for the tax credit. In addition, the IRS released frequently asked questions related to the alternative fuel vehicle refueling property credit.

"Additional clarity around the law's incentive to build new charging infrastructure in communities that need it most will help drive continued progress in 2024," Deputy Treasury Secretary Wally Adeyemo said in a statement reported by Accounting Today.

Accounting Today reported that, even with tax incentives for electric vehicles, the demand for them has gone down recently. It cited a report by Axios, detailing how companies such as Ford and GM have pulled back on production. Accounting Today noted that some drivers have also faced long lines at charging stations during the cold weather, when the batteries can take longer to charge and the driving range can be reduced. It reported that the new guidance is part of the Biden Administration's effort  to provide incentives for installing more charging stations.

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