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How does the federal plug-in electric vehicle (PEV) tax credit phase-out work, and has it begun for any vehicle manufacturers? What is the status of other federal alternative fuel tax credits?

Question of the Month: How does the federal plug-in electric vehicle (PEV) tax credit phase-out work, and has it begun for any vehicle manufacturers? What is the status of other federal alternative fuel tax credits?

Answer: The Internal Revenue Service (IRS) Qualified Plug-In Electric Drive Motor Vehicle Tax Credit begins to phase out for a manufacturer when at least 200,000 qualifying vehicles produced by that manufacturer have been sold for use in the United States, based on sales after December 31, 2009. Many of the other federal tax credits, such as the Alternative Fuels Excise Tax Credit and the Alternative Fuel Infrastructure Tax Credit, expired at the end of 2013 and have not been extended or renewed. Additional tax credits have or will expire this year.

Federal PEV Tax Credit Phase-Out
Each manufacturer must report quarterly to the IRS on their vehicle sales. According to the IRS Plug-In Electric Drive Motor Vehicle Credit Quarterly Sales page (http://www.irs.gov/Businesses/IRC-30D-Plug-In-Electric-Drive-Motor-Vehicle-Credit-Quarterly-Sales), no manufacturers have reached the 200,000 cumulative PEV sales mark. This means all qualified vehicles are still eligible for their full credit amounts.

The phase-out period stretches over one year, beginning in the second calendar quarter after the quarter in which the manufacturer hits the 200,000 vehicle sales mark. From there, all qualifying vehicles sold by the manufacturer are eligible for 50% of their specified credit for the first two quarters and 25% of the credit for the next two quarters. For example if a manufacturer sells its 200,000th vehicle in the first quarter (Q1) of 2015, the credit amounts for all of that manufacturer’s eligible vehicles would phase out as shown in the table below.

 

Quarter

Credit

Q1 2015

Full amount

Q2 2015

Full amount

Q3 2015

50% of full amount

Q4 2015

50% of full amount

Q1 2016

25% of full amount

Q2 2016

25% of full amount

Q3 2016

No credit

 

Also see the phase-out example on FuelEconomy.gov (http://www.fueleconomy.gov/feg/taxphevb.shtml).

Below are some other helpful facts about the federal PEV tax credit:

  • Tax credit amounts range from $2,500 to $7,500 based on the vehicle’s battery capacity and weight. Details can be found on the IRS Qualified Vehicles page (http://www.irs.gov/Businesses/Qualified-Vehicles-Acquired-after-12-31-2009).
  • To file for the credit, you must complete IRS form 8936 (http://www.irs.gov/pub/irs-pdf/f8936.pdf) and attach it to your federal tax return.
  • To qualify for the credit, you must own the vehicle. This means that if you lease a vehicle, you are not eligible. That said, the lessor may decide to pass the discount along to you.
  • Only new vehicles are eligible; the vehicle may not have been titled before.

 

For more information, see the Plug-In Electric Drive Vehicle Credit page (http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credit-(IRC-30-and-IRC-30D).

Other Federal Tax Credits

Several tax credits expired after December 31, 2013, including:

  • Alternative Fuel and Alternative Fuel Mixture Excise Tax Credits
  • Biodiesel Income Tax Credit and Biodiesel Mixture Excise Tax Credit
  • Alternative Fuel Infrastructure Tax Credit
  • Qualified Two- or Three-wheeled Plug-in Electric Drive Motor Vehicle Tax Credit

 

Even more recently, both the Hydrogen Fuel Excise Tax Credit and the Hydrogen Fuel Mixture Excise Tax Credit expired as of September 30, 2014. The Fuel Cell Motor Vehicle Tax Credit and Hydrogen Fuel Infrastructure Tax Credit are set to expire on December 31, 2014.

There have been several bills introduced to extend these tax credits during the 113th Congress. For example, the EXPIRE Act of 2014 (S. 2260;http://hdl.loc.gov/loc.uscongress/legislation.113s2260) proposed to extend the tax credits for 2- or 3-wheeled plug-in electric vehicles, biodiesel and renewable diesel fuel mixtures, alternative fuels, hydrogen, fuel cell vehicles, and alternative fuel infrastructure through 2015. However, none of the bills have been enacted as of October 2014.

For more information on federal incentives for alternative fuels and vehicles, see the following websites:

 

Finally, please note that the Technical Response Service recommends consulting a qualified tax professional or the IRS before making any tax-related decisions.

Clean Cities Technical Response Service Team

technicalresponse@icfi.com

800-254-6735

 

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Technical NGV Training Coming to Baton Rouge

NGV Technician and Fleet Operations Safety Training & CNG Fuel System Inspector Training

Registration deadline has been extend until November 30th for NGVi’s natural gas vehicle (NGV) technician training in Baton Rouge December 9-11, 2014! The one-day NGV Technician and Fleet Operations Safety Training is currently $595, and the CNG Fuel System Inspector Training is $955. If you register for both classes and pay by credit card online only you can receive a bundle discount of $100 off! 

For questions or additional information, please contact:

Jamie Johnson, Customer Service Specialist
Natural Gas Vehicle Institute (NGVi®)
702-254-4180 x 26
jjohnson@ngvi.com

December 9, 2014
NGV Technician and Fleet Operations Safety Training

One-day course that teaches all elements involved in the safe maintenance, fueling procedures and operation of NGVs. Includes instruction on all high-pressure components, cylinders and defueling, as well as facility safety. Recommended prerequisite for technicians who will take CNG Fuel System Inspector Training. 

Who Should Attend:

  • Technicians who will perform maintenance on natural gas vehicles
  • All employees involved in NGV fleet operations
  • Fleet managers and supervisors
  • Corporate/agency safety managers
  • Risk management staff 

December 10-11 2014
CNG Fuel System Inspector Training 

Two-day training that teaches the proper techniques for inspecting the entire high-pressure CNG fuel system, including compressed natural gas fuel storage cylinders. Prepares technicians for the CSA Group CNG Fuel System Inspector Certification exam. 

Who Should Attend:

  • Technicians responsible for maintaining natural gas vehicles
  • Corporate/agency safety managers
  • Fleet managers and supervisors
  • Risk management staff
  • Anyone preparing to take the CSA Fuel System Inspector Certification Exam 

For more information, visit  http://www.ngvi.com/

 

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PERC offers special incentives for Propane mowers!

The Propane Education & Research Council offers incentives for the purchase or conversion of qualified mowers.

And now through December 2014, the incentive amounts are DOUBLED! Fleets, landscape companies, and other eligible entities can receive $2,000 per qualifying new mower purchase or $1,000 for each mower conversion. A single company or organization may receive incentive payments for the purchase of up to 25 eligible mowers per year.

A limited number of incentives are available, so PERC recommends applying for participation in the program before making a purchase. For the application and additional information, visit the Propane Mower Incentive Program website (http://www.propane.com/commercial-landscape/programs-and-incentives/propane-mower-incentive-program/).

Please also note that state propane gas associations offer additional incentives for propane-powered commercial mowers, which can be combined with PERC’s program. Search the Alternative Fuels Data Center State Laws and Incentives database (http://www.afdc.energy.gov/laws/state) for more information.

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