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Plug in a tax credit for a new vehicle

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. Can I get a tax deduction for buying one of the new plug-in vehicles? D.D., San Diego

A. Actually, it’s a tax credit (even more valuable than a deduction). It is available for plug-in vehicles acquired after 2009 that meet certain requirements. The credit may  be as high as $7,500 based on the vehicle’s traction battery capacity and its gross vehicle-weight rating.

Tip: The credit begins to phase out for each manufacturer in the second quarter following the calendar quarter in which at least 200,000 qualified plug-in electric drive vehicles have been sold by that manufacturer for use in the United States.  (Based on current sales rates, that could take 50 years.)

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