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Alternative Fuel Vehicle Refueling Property Tax Credit
The IRA modifies the tax credit for alternative fuel vehicle refueling property (i.e., electric vehicle charging stations) and extends it to any charging stations placed in service after December 31, 2021, and before January 1, 2033. The tax credit is limited to entities that place electric vehicle charging stations in service within low-income or non-urban census tract areas during the taxable year. Qualifying electric vehicle charging stations include charging stations for two and three-wheeled vehicles (for use on public roads) as well as bidirectional charging equipment (i.e., vehicle-to-grid or V2G).
For entities, the tax credit is 30% of the cost of the installed electric vehicle charging station if certain prevailing wage and apprenticeship requirements are met, such as ensuring all contractors involved in installing the station are paid the applicable location’s prevailing wages and that a certain percentage of labor hours be performed by qualifying apprentices. If the prevailing wage and apprenticeship requirements are not met, the tax credit amount is 6% of the cost of the installed electric vehicle charging station with a maximum cap of $100,000 per station.
Tax-exempt entities are able to claim these tax credits as cash payments under Section 6417. For example, if a nonprofit summer camp enters into a contract to build an electric vehicle charging station on its property in a low-income or non-urban census tract area that costs $6,000, then the nonprofit would be entitled to a cash payment of $1,800 provided that the applicable prevailing wage and apprenticeship requirements are met.