Right now, there is a special federal tax break, the Arizona electric vehicle tax credit, that is available to all tax paying citizens of the state. Couple that with the state incentives that are out there ready to be had and you’ve got a one-two punch on your tax bill. Here’s all you need to know.
Federal Tax Breaks for Arizona Electric Vehicles
There’s been a great overhaul of the electric vehicle tax credit system thanks to the Inflation Reduction Act in 2022.
According to USNews, “the Inflation Reduction Act places strict limits on who qualifies to get a tax credit. Single filers must have a modified adjusted gross income (MAGI) of $150,000 or less. Joint filers have a $300,000 limit, while heads of household must have a MAGI of $225,000 or less.” If you qualify, you can receive up to $4,000 for a used electric vehicle and up to $7,500 for a new electric vehicle.
Beginning 2024, this credit can lower the price of the car and be applied at time of purchase. Here’s more to know about the federal program:
- Buyers have until the end of 2023 to buy an electric vehicle and qualify, with the credit being applied in 2024 when the 2023 taxes are filed.
- At the start of 2024, the credit is given at the time of purchase
- The entire program goes away in 2032
- Clean vehicles are part of the program, so electric and hydrogen fuel-cell vehicles
- Qualifying vehicles must be under $55,000 for a car, and under $80,000 for a truck, SUV, or van
Arizona Electric Vehicle State Incentives
The US Department of Energy lists several state incentives for Arizona residents with electric vehicles. Here are three examples of these state incentives, you can see the full list at the US Department of Energy’s website.
- The Alternative Fuel Vehicle Parking Incentive – ability to park without penalty, so long as they are using alternative fuel such as electricity, in areas designed for carpool operators. In addition to electric vehicles, this incentive is also for natural gas, propane, hydrogen, and blended hydrogen and natural gas vehicles.
- Reduced Alternative Fuel Vehicle License Tax – those with alternative fuel vehicles pay $4 per $100 in assessed value with a minimum set at $5. The assessed value of the vehicle is assessed at 20% of MSRP for those vehicles registered in 2022 and reduced by 15% each succeeding year. This reduction does not apply to any vehicle after December 31, 2022.
- Alternative Fuel and Alternative Fuel Vehicle Use Tax Exemption – only pertains to natural gas, propane, electric, hydrogen, or hydrogen blended with natural gas or propane vehicles and lets the Arizona use tax not apply to those vehicles.
Community Help for Arizona Solar Power and Electric Vehicles
The Arizona electric vehicle tax credit has far reaching implications on saving you money while being eco-conscious. At Solar Optimum we understand harnessing solar energy, electric cars and services, and other alternative fuel options. Contact us to talk more about your options for going solar in Buckeye, Carefree, Cave Creek, El Mirage, Goodyear, Litchfield Park, Paradise Valley, Phoenix, Surprise, Wickenburg, and Youngtown.