Tax Breaks for an Electric Car Conversion
The American Recovery and Reinvestment Act of 2009 attempts to bolster the United States economy via a wide range of tax breaks and incentives, ranging from homebuyer credits to increased transportation subsidies to education benefits. Among these initiatives, the act provides tax breaks for electric car conversion, though the conversion must meet certain parameters to apply. Converting isn't the only way to get a break from going green -- the act extends to numerous eco-friendly endeavors.
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About Conversion
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Conversion kits allow car owners to convert automotive gasoline engines to plug-in electric drive motors. Kits come in the more common regenerative current DC type or less common induction-based AC type. Most kits use lead acid batteries. At the time of publication, prices of plug-in electric cars such as the Chevy Volt sell for $40,000, while luxury electrics like the Tesla Roadster reach prices of up to $100,000. Alternatively, owners can convert an electric motor to battery power for less than $10,000.
Conversion Tax Credit
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Section 1143 of the American Recovery and Reinvestment Act grants a major tax break for taxpayers who invest in an electric car conversion kit. Americans who use a conversion kit to transition from a gasoline engine to a qualified plug-in electric drive motor can receive a tax credit equal to 10 percent of the cost of converting. At the time of publication, those who convert can receive a maximum tax credit amount of $4,000.
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Eligibility
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This credit applies only to conversions made between February 17, 2009, and December 31, 2011. To be eligible for the credit, the cost of converting a vehicle from a gasoline engine to an electric motor cannot exceed $40,000. Taxpayers who have claimed a hybrid vehicle credit can still claim a conversion kit credit, even during the same year.
Other Automotive Credits
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At the time of publication, taxpayers are entitled to a tax credit of up to $7,500 for the purchase of a plug-in electric drive motor vehicle after the date of December 31, 2009. The vehicle must have four wheels, weigh less than 14,000 pounds and use an externally charged battery with a rating of at least 4 kilowatt hours. Low-speed and three-wheeled electric vehicles are also eligible for a tax credit of up to 10 percent of their purchase price.
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References
- IEEE UCSD Student Branch; Electric Vehicle Conversion Design; 2009
- IRS.gov: The American Recovery and Reinvestment Act of 2009: Information Center
- U.S. Government Printing Office; American Recovery and Reinvestment Act; February 2009
- IRS.gov: Energy Incentives for Individuals in the American Recovery and Reinvestment Act
Resources
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