Tax Credits

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.

This page was last updat­ed on Jan­u­ary 24, 2024.

Supercharge Your Savings

EV owners may qualify for a state or federal tax credit for the purchase/lease of a plug-in hybrid and/or battery electric vehicle.

$5,000 for the purchase or lease of an electric or plug in hybrid EV

Buy or lease a new EV or hybrid and get a $5,000 tax credit

$5,000

for the pur­chase or lease of full bat­tery elec­tric or plug in hybrid EVs with MSRP up to $80,000

The fine print:

  • Effec­tive July 1, 2023
  • Start­ing in 2024, indi­vid­u­als may receive an addi­tion­al $2,500 for EVs under $35,000
  • Between Jan­u­ary 1, 2024 and Jan­u­ary 1, 2026, an addi­tion­al cred­it of $600 is allowed if the pur­chas­er or lessee assigns the entire allow­able cred­it to a financ­ing enti­ty or motor vehi­cle dealer.
  • Elec­tric motor­cy­cles are not eligible
  • For more infor­ma­tion vis­it: The Col­orado Ener­gy Office

Up to $7500 discount on a new EV — Federal Electric Vehicle Tax Credits

Buy a new EV and get up to a $7500 tax credit

$3,750

if the vehi­cle has bat­tery com­po­nents that are man­u­fac­tured or assem­bled in North America 

(list­ed here)

$3,750

if the vehi­cle has crit­i­cal min­er­als that were extract­ed or processed in the U.S. or coun­tries with which the U.S. has a free trade agree­ment, or use crit­i­cal min­er­als that were recy­cled in North America.

Will the EV you like qualify? Check here!

The fine print: 

**New Requirements (Effective April 18)**

If you take pos­ses­sion of a new clean vehi­cle on or after April 18, 2023, it must meet crit­i­cal min­er­al and bat­tery com­po­nent require­ments to qual­i­fy for the cred­it. This applies even if you bought the vehi­cle before April 18. Find details here.

Only cars under $55,000 or SUVs, vans, and pick­up trucks under $80,000 are eli­gi­ble for the credit.

Updat­ed Feb­ru­ary 6, 2023 — IRS has updat­ed the clas­si­fi­ca­tion of these EVs and raised the MSRP cap from $55,000 to $80,000: Audi Q5 PHEV, Cadil­lac Lyric, Ford Escape Plug In Hybrid, Ford Mus­tang Mach‑E, Lin­coln Cor­sair Plug In Hybrid, Tes­la Mod­el Y (all vari­ants), Volk­swa­gen ID.4 (all variants).

Income caps for con­sumers: $150,000 for sin­gle fil­ers, $225,000 for head of house­hold and $300,000 for joint fil­ers. Lease cred­it goes to leas­ing com­pa­ny – may low­er lease cost.

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. Writ­ten bind­ing con­tracts (non-refund­able deposit or down pay­ment of 5% of the total con­tract price) to pur­chase a qual­i­fy­ing elec­tric vehi­cle before August 16, 2022 should not be affect­ed by new tax cred­it stip­u­la­tions. More infor­ma­tion here.

Start­ing in 2024, deal­ers will be allowed to offer the EV tax cred­it as a point-of-sale dis­count. This applies to both new and used EV tax cred­its, low­er­ing the upfront vehi­cle cost instead of hav­ing to apply for the cred­it when fil­ing taxes.

Tax­pay­ers may only claim one cred­it per vehicle.

Vehi­cles NOT eli­gi­ble include GMC Hum­mer EV, Lucid Air, Tes­la Mod­el S and Mod­el X (exceeds pric­ing lim­it) and BMW i4, Hyundai Ion­iq 5, Kia EV6, Sub­aru Solter­ra, and Toy­ota bZ4X (not assem­bled in North America).

Check out this one pager from the IRS regard­ing EV tax cred­its. For tax cred­it infor­ma­tion on com­mer­cial vehi­cles, click here.

Up to $4000 discount on a used EV — Federal Electric Vehicle Tax Credits

Buy a USED EV and get up to a $4000 tax credit

$4,000

or %30 OFF

(Whichever is lower)

The fine print:

  • Only eli­gi­ble for vehi­cles under $25,000, at least 2 years old, pur­chased from a dealer.
  • Income caps for con­sumers: $75,000 for sin­gle fil­ers, $112,500 for head of house­hold and $150,000 for joint filers.
  • For oth­er fre­quent­ly asked ques­tions about the EV tax cred­its from the Infla­tion Reduc­tion Act, please click here.

Individuals/Residents — EV Charging Units, 30% off (up to $1,000 per unit)

Individuals/Residents — get up to $1,000 for EV Charging Equipment

$1,000

or 30% OFF

(Whichever is lower)

The fine print:

Individuals/Residents can get a tax cred­it of 30% (up to $1,000 per unit) of the cost of the EV charg­ing equipment

  • Bidi­rec­tion­al charg­ing equip­ment is eligible
  • 2 and 3 wheeled equip­ment is eli­gi­ble (like e‑bikes!)
  • Equip­ment must be placed in a low-income com­mu­ni­ty or non-urban area
  • More infor­ma­tion here

Commercial use — EV Charging Units, 6% off (up to $100,000 per unit)

Commercial uses — get up to $100,000 for EV Charging Equipment

$100,000

or 6% OFF

(Whichever is lower)

The fine print:

Those buy­ing for com­mer­cial uses can get a tax cred­it of 6% (up to $100,000 per unit) of the cost of the EV charg­ing equipment

  • Bidi­rec­tion­al charg­ing equip­ment is eligible
  • 2 and 3 wheeled equip­ment is eli­gi­ble (like e‑bikes!)
  • Equip­ment must be placed in a low-income com­mu­ni­ty or non-urban area
  • More infor­ma­tion here

Vehicle Exchange Colorado Program — get up to $6,000 for your old or high-emitting vehicle

Get a rebate when exchanging an old or high-emitting vehicle.

$6,000

for new EVs

$4,000

for used EVs

The fine print:
Participant Eligibility:
  • Col­orado resident
  • 18 years or older
  • Eli­gi­ble to pur­chase or lease a vehi­cle in Colorado
  • Own an eli­gi­ble old or high-emit­ting vehicle

Meet at least one of the fol­low­ing income requirements:

  1. House­hold income below 80% of the area medi­an income in the coun­ty where the res­i­dent lives
  2. OR Enroll­ment in any one of the fol­low­ing finan­cial assis­tance programs:
  • Col­orado Afford­able Res­i­den­tial Ener­gy (CARE) Program
  • Colorado’s Weath­er Assis­tance Pro­gram (WAP)
  • Med­ic­aid
  • Region­al Trans­porta­tion Dis­trict (RTD) LiVE
  • Sec­tion 8 vouch­er holder
  • Spe­cial Sup­ple­men­tal Nutri­tion Pro­gram for Women, Infants, and Chil­dren (WIC)
  • State of Col­orado Low-Income-Ener­gy Assis­tance Pro­gram (LEAP)
  • Sup­ple­men­tal Nutri­tion Assis­tance Pro­gram (SNAP)

Only one VXC rebate is allowed per tax household.

Exchange Vehicle Eligibility:
  • The vehi­cle title must be issued to sole­ly the par­tic­i­pant AND must not have a lien (there must not be an out­stand­ing loan for the vehicle)
  • The vehi­cle must be cur­rent­ly reg­is­tered under the participant’s name with the Col­orado Depart­ment of Motor Vehicles
  • Vehi­cle must be operational
  • Vehi­cle must be gaso­line or diesel-powered

Vehi­cle must meet one or more of the fol­low­ing criteria:

  1. Vehi­cle mod­el year at least 12 years old (mod­el year 2011 or old­er for a 2023 appli­ca­tion) OR
  2. Vehi­cle fails an emis­sions test in Colorado

Motor­cy­cles, recre­ation­al vehi­cles (RVs), campers, and boats are not eli­gi­ble for VXC.

Eligible EVs:

Par­tic­i­pants may redeem a point of sale rebate for the fol­low­ing types of vehicles:

  • Bat­tery elec­tric (BEV), or ful­ly elec­tric vehi­cles, which are pow­ered com­plete­ly by a battery
  • Plug-in Hybrid Elec­tric Vehi­cles (PHEVs), which are pow­ered by a bat­tery, with an aver­age range of 20–50 miles, and a tra­di­tion­al gas tank and engine.

VXC par­tic­i­pants can receive a rebate for a new or used BEV or PHEV with a manufacturer’s sug­gest­ed retail price (MSRP) or pur­chase price of $50,000 or less

VXC par­tic­i­pants can only pur­chase or lease a new or used BEV or PHEV from a VXC-autho­rized auto­mo­bile dealer.

For oth­er infor­ma­tion and fre­quent­ly asked ques­tions about the VXC Pro­gram please vis­it: The Col­orado Ener­gy Office

Up to $1,100 off an E‑Bike for eligible Colorado residents

Get a rebate on the purchase of a new e‑bike

$500

E‑bike rebate for qual­i­fy­ing Col­orado res­i­dents earn­ing between 80 to 100 per­cent of their coun­ty area's medi­an income.

or $1,100

E‑bike rebate for qual­i­fy­ing Col­orado res­i­dents earn­ing less than 80 per­cent of their coun­ty area's medi­an income.

The fine print:

Participant Eligibility:
  • Must be a Res­i­dent of the State of Colorado
  • Must be at least 18 years of age or older
  • Must be able to pro­vide proof of Col­orado address
  • Must be able to pro­vide proof of income
E‑Bike Eligibility:
  • Can be any class 1, 2, or 3 E‑Bike in accor­dance with the State of Colorado's E‑Bike definition
  • Must have an elec­tric motor not exceed­ing 750 watts
  • Full sus­pen­sion moun­tain bikes do not qualify

For more infor­ma­tion vis­it: The Col­orado Ener­gy Office

Up to $1,200 off an E‑Bike for eligible Denver residents

The Denver E‑Bike Rebate is ON HOLD!
Get a rebate on the purchase of a new e‑bike

$300

E‑bike rebate for Den­ver Residents

$500

Car­go E‑bike rebate

$1,200

E‑bike rebate for income-qualified

Update from the Col­orado Ener­gy Office as of 12/28/23: E‑bike rebate appli­ca­tions will be tem­porar­i­ly put on hold until Feb­ru­ary 2024.

The fine print:

The appli­cant must be a res­i­dent of Den­ver, Col­orado and 16 years of age or old­er. Proof of a phys­i­cal Den­ver address is required

Stan­dard Rebate: Den­ver res­i­dents can save up to $300 on the sale of an e‑bike or up to $500 on the sale of an e‑cargo bike

Income-Qual­i­fied Rebate: Income-qual­i­fied res­i­dents can save up to $1,200 on the sale of an e‑bike or up to $1,400 on the sale of an e‑cargo bike

Adap­tive Rebate: Per­sons with dis­abil­i­ties may be eli­gi­ble to save up to $1,400 on the sale of an adap­tive e‑bike. There are a lim­it­ed num­ber of adap­tive rebates and a sep­a­rate appli­ca­tion process — email

Incen­tive can­not exceed the total pur­chase price

  • One e‑bike per person
  • Full-sus­pen­sion moun­tain bikes are exclud­ed from the program
  • No min­i­mum or max­i­mum pur­chase price
  • Must be pur­chased from a par­tic­i­pat­ing bike shop, which can be found here
  • More details here

The ten­ta­tive rebate release dates for 2023 are:

  • Tues­day, Jan­u­ary 31
  • Tues­day, March 28
  • Tues­day, May 30
  • Tues­day, July 25
  • Tues­day, Sep­tem­ber 26
  • Tues­day, Novem­ber 28

Den­ver res­i­dents can now receive up to $1,700 in rebates for pur­chas­ing an elec­tric bike. Terms and con­di­tions apply. Rebates are com­pet­i­tive and inter­est­ed indi­vid­u­als should sub­scribe to Den­ver Gov's newslet­ter to be noti­fied of appli­ca­tion release days. About half of all rebates are pri­or­i­tized for income-qual­i­fied applicants.

Up to $1,00 off for home wiring upgrades

Denver charger rebate for home wiring upgrades

$500

or 80% OFF

(Whichever is lower)

The fine print:

  • Can be stacked with Xcel Energy's EV Charg­ing rebate
  • EV Charg­ing Home Wiring Rebate pro­vides up to $500 to assist with installing either an Ener­gy Star Cer­ti­fied Lev­el 2 EV Charg­er, a home Tes­la charg­er, or a Ford Charge Sta­tion Pro
  • Work with a reg­is­tered con­trac­tor to install this equipment
  • Bidi­rec­tion­al charg­ing instal­la­tions may receive up to $2,000 
  • More info here

Sparked Your Interest?

Beyond fed­er­al and state tax cred­its, many local util­i­ty com­pa­nies offer entic­ing incen­tives for elec­tric vehi­cle own­ers. Tap­ping into these addi­tion­al rebates can super­charge your sav­ings, mak­ing the switch to elec­tric even more rewarding.

 

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