EV tax credits are one of the best ways to save money when purchasing an electric vehicle. In Colorado, the state’s Innovative Motor Vehicle Credit program offers residents a $5,000 incentive for buying and leasing EVs with MSRPs under $80,000. Colorado EV Tax Credit is open to all Colorado residents, and the incentive is claimed on the state income tax return filed the year following purchase or lease. It is also refundable, which means that if the credit is larger than your income tax liability, you will receive the remaining amount as a rebate.
In addition to the EV tax credit, Colorado has a number of other incentives for electric vehicles, including utility rebates and charging station discounts. Some utilities even offer a point-of-sale rebate for installing home charging stations. In a state that is already leading the way on climate change, these additional incentives will help to accelerate EV adoption and further reduce emissions. The new rebates will complement the federal EV tax credit, which is now refundable up to $7,500. In addition, Xcel Energy has added a $1,500 rebate for EV buyers that is only available to customers of the utility company.
These incentives are a great way to reduce the cost of an EV, particularly for low-income families. Transportation costs can eat up 20% of a family’s budget, so these discounts can make it more affordable to switch to an EV. The best part is that the Colorado EV credit is refundable, meaning it can be claimed regardless of how much you owe in taxes.
Eligibility
If the state credit amount is larger than what you owe in taxes, it will be sent to you as a check by the state revenue department. This is a key difference from the non-refundable federal credit.
Unlike the federal EV tax credit, which has strict price and income requirements, the Colorado credit is available to anyone who buys or leases a qualifying EV. It is even available to Xcel Energy customers, who can apply it toward a new or used electric car. This is in addition to a separate EV rebate offered by Xcel Energy. However, Xcel rebates are not stackable with the Colorado EV tax credit. This is because the state tax credit is refundable, while the Xcel Energy rebate is not.
The new law also includes a $12,000 state tax credit for medium and heavy-duty electric trucks. This increase is intended to make EV truck adoption more feasible for commercial users. It also expands state points of sale incentives for e-bikes and statewide rebates for home heat pumps. The legislation was signed by Gov. Jared Polis. HB23-1272 is part of a package of new clean energy incentives that he has introduced.
How to Claim Colorado EV Credit?
To claim the Colorado EV credit, you’ll need to file your Colorado income tax return and include form DR 0617. You can do this electronically or by mail, depending on your preferences. If you assign your EV credit to a financing institution, they’ll also need to submit the assignment information electronically. For more information, visit the Colorado Department of Revenue’s website.