Disclaimer: Drive Electric Colorado and its affiliates are not tax advisors. This information is provided to help you make an informed decision. Please consult your tax advisor for advice about your specific situation.

Colorado Tax Credits

  • $4,000 credit received with state income tax refund – may be applied at purchase with many electric vehicle manufacturers
  • $2,000 for 2-year minimum leases
  • Unused tax credit can be rolled forward to future years
  • Decreases in 2021 to $2,500

Colorado residents are able to claim an additional state tax credit of $4,000 when they buy an electric vehicle. Some dealers offer this at point of sale. The credit goes down at the beginning of the new year!

The credits decrease every few years for purchases $4,000 in 2020, to $2,500 in 2023 and $2,000 in 2026.

For leases: $2,000 in 2020, $1,500 in 2023, $1,500 in 2026

For tax years January 1, 2010 – January 1, 2022, the credits are refundable. The credit is first applied against the income tax liability of the person who purchases, leases, or converts the qualifying motor vehicle. If the credit exceeds the tax due, the excess credit will be refunded. For additional details, please visit Colorado FYI Income 69.

 Federal Electric Vehicle Tax Credits

  • $2,500-$7,500 tax credit
  • Lease credit goes to leasing company – may lower lease cost
  • Phase out begins when 200,000 sold by manufacturer
  • Tesla & GM – no longer eligible

New electric vehicles purchased after 2010 may be eligible for a federal income tax credit of up to $7,500 – assuming sufficient income tax appetite. The credit amount will vary based on the capacity of the battery used to power the vehicle. Lease credit goes to the leasing company, typically lowering the lease cost.

The credit will be available until at least 200,000 of the manufacturer’s qualifying vehicles have been sold or leased. At this point, the credit begins to phase out for that manufacturer.

Check fueleconomy.gov for a list of vehicles and applicable credit amounts.

Federal Alt Fuel Infrastructure (Charger) Tax Credit

  • $1,000 tax credit for purchase and installation of a new Level 2 Electric Vehicle Charger
  • Unused tax credit can be rolled forward to future years
  • HURRY! This tax incentive expires on December 31, 2020

Consumers who purchase and install a residential electric vehicle charger or purchase qualified residential fueling equipment before December 31, 2020 are eligible to receive a $1,000 tax credit. For additional details, please visit afdc.energy.gov.