Federal Tax Credit Supports Installation of Electric Vehicle Chargers

June 22, 2020 | | Policy

A formerly expired tax incentive known as the Alternative Fuel Infrastructure Tax Credit (AFITC) was quietly renewed by Congress in late 2019 and will allow business owners and individuals interested in installing electric vehicle charging stations to earn tax credits worth up to $30,000 through December 31, 2020. Update: The Alternative Fuel Infrastructure Tax Credit has been extended through December 31, 2021.

AFITC is a federal incentive designed to lighten the financial burden of installing fueling infrastructure for a variety of alternative fuels like electricity, hydrogen, natural gas, and E85. The tax credit will be equal to 30 percent of the total investment on the project, including hardware, shipping, and installation costs. Despite the $30,000 cap and exclusion of permitting and inspection costs, the AFITC represents a lucrative opportunity for organizations and businesses looking to invest in electric vehicle chargers. Although the credit was primarily designed for business owners, private households can also claim a credit of up to $1,000 for charger installations on their private property.

Although versions of this incentive existed as far back as 2005, the AFITC had been allowed to expire at the end of 2016 and several years went by without its replacement. However, in 2019, the measure was re-introduced as a part of the Further Consolidated Appropriations Act, with a new expiration date of December 31, 2020. The bill also allowed for the retroactive application of the tax credit on projects installed in 2018 or 2019, so charging projects that took place in that interim may still be eligible for the incentive.

As it stands, there is no guarantee that the AFITC will be extended after the December 2020 deadline, so interested businesses and individuals are encouraged to make use of the credit while it is available. Find more detailed information on the AFITC and the appropriate tax forms on the IRS website.

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