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Clean Cars and Charging Units Tax Credits

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FAQs:

Clean Car Tax Credit

 

1. What is the Clean Car Tax Credit?

This tax credit is a personal and business income tax credit for electric vehicles, plug-in hybrid electric vehicles and other zero-emission vehicles, as well as for home and commercial electric vehicle chargers.

      

    2. What vehicles are eligible?

    New or used electric, plug-in electric hybrid, and fuel cell motor vehicles are eligible. To be eligible for the tax credit, previously owned vehicles must have a model year that is at least two years prior to the calendar year in which the taxpayer purchased or leased the vehicle. Leased vehicles are also eligible provided the lease is for a term of at least three years.

    A new vehicle must have a base manufacturer suggested retail price, before options and destination charges and before any taxes are imposed, of fifty-five thousand dollars ($55,000) or less.

    A previously owned vehicle must have a market value of twenty-five thousand dollars ($25,000) or less, be certified by the certified by the dealer selling the motor vehicle and have a dealer-provided warranty of at least a one-year against defects and repairs.

    A car is eligible only twice in its lifetime – once when it is sold new, and the second time when it is sold used. Any third or subsequent sales are not eligible for the tax credit.

         

        3. What chargers are eligible? 

        Each level of charging offers different charging speeds and convenience, catering to various use cases and requirements of EV owners. When considering an EV charger for home or business use, it’s essential to assess your charging needs, available electrical infrastructure, and budget to choose the most suitable option. Here is an overview of the different levels of EV chargers: 

        Level 1: Chargers are eligible for the Clean Car Charging Unit Tax Credit:

        Level 1 chargers use a standard 120-volt AC outlet, typically found in residential settings. These chargers are slow, inexpensive or free to install and can be convenient for overnight charging or in situations where faster charging isn’t necessary. Level 1 chargers typically deliver around 2 to 5 miles of range per hour of charging, depending on the vehicle’s battery capacity. 

        Level 2: Chargers are eligible for the Clean Car Charging Unit Tax Credit:

        Level 2 chargers use a 240-volt AC outlet and are faster than Level 1, making them suitable for home charging and some public charging stations. Level 2 chargers typically deliver around 10 to 60 miles of range per hour of charging, depending on the charger’s power output and the vehicle’s capabilities. They are commonly found in residential garages, workplaces, and public charging stations.

        Level 3: Charging (DC Fast Charging or DC Quick Charging) are eligible for the Clean Car Charging Unit Tax Credit:

        Level 3 chargers use direct current (DC) and are significantly faster than Level 1 and Level 2 chargers. They are primarily installed in public charging stations along highways, at rest stops, or in commercial areas. Level 3 chargers can deliver high power and charge EV batteries to 80% or more in under an hour, making them suitable for long-distance travel. However, Level 3 chargers require special equipment, a special connection to the electrical grid, and are more expensive to install than Level 1 and Level 2 chargers. 

          

        4. How much are the tax credits?  

        The tax credits vary depending on the type of vehicle and the taxable year in which the vehicle was purchased. See tables below for details on rebate amount for vehicles and chargers.

         

        Vehicles: 

          Tax year of vehicle purchase 2024 – 2026 2027 2028 2029
        New EV $3,000 $2,200 $1,470 $960
        Plug-in hybrid/Fuel Cell $2,500 $1,850 $1,225 $800
        Used  EV $2,500 $1,850 $1,225 $800
        Plug-in hybrid/Fuel Cell $2,000 $1,480 $980 $640

         

         

        Charging Unit:

        Charging unit type  Amount
        Direct current fast charger  $    25,000.00
        Fuel cell charging unit  $    25,000.00
        Other electric vehicle charging units (e.g. Level 2)  $        400.00

         

        5. Who is eligible to receive the EV tax credit?   

        Vehicles:

        Taxpayers who are not dependents of another individual and who purchase or lease (for at least three years) an electric, plug-in hybrid electric, or fuel cell motor vehicle are eligible.

        Please note: to qualify for the tax credit, a person must have purchased the EV (new or used) through a dealer licensed by the New Mexico Motor Vehicle Division, or a dealer located on tribal land within New Mexico. You cannot get the credit if you purchase the car from another individual.

        Chargers:

        The program offers a tax credit toward the purchase and installation of qualifying electric vehicle charging equipment, and for the installation of charging units connected to electric facilities needed to serve their electric vehicle charging equipment. The charging unit must be installed by a licensed electrician and connected to a utility network.

          

        6. If I sell my used EV, do I get the tax credit?  

        If you sell your used electric, plug-in hybrid or fuel cell vehicle, you, as the seller, would not be eligible to claim the clean car income tax credit for that transaction. The tax credit is available to taxpayers who purchase or lease qualifying vehicles. Same with chargers. Sellers are not the recipients of Clean Car Tax Credit.

         

        7. When are the tax credits available?   

        Vehicles and chargers purchased on or between May 15, 2024 through December 31, 2029, are eligible. However, we are still finalizing the rules and building the online application portal, so you cannot apply for the tax credit yet. We anticipate opening the online portal, where you will apply, in summer 2024.

         

        8. How do I get the tax credit?

            1. Purchase or Lease a Qualifying Vehicle or purchase and install a charging unit: Buy or lease an eligible vehicle, or buy an eligible charger, between May 15, 2024 and December 31, 2029.
            1. Apply for Certificate of Eligibility: Submit an electronic application for certificate of eligibility to the Energy, Minerals, and Natural Resources Department. However, we are still finalizing the rules and other details, so you cannot apply for the tax credit quite yet. We anticipate opening the online portal, where you will apply, in summer 2024. You must apply no later than one year from the date on which the vehicle is purchased or the lease is entered into.
            1. Receive Certificate of Eligibility: If the Energy, Minerals and Natural Resources Department determines that you meet the requirements, we will issue a certificate of eligibility stating the amount of tax credit you are eligible for and the taxable years in which the credit may be claimed.
            1. Claim the Tax Credit: When you file your taxes with the state of New Mexico, claim the tax credit in accordance with the instructions provided by the Taxation and Revenue Department. The credit must be claimed within three taxable years of the end of the year in which the department certifies the credit.

             

            9. Is this a point-of-sale rebate?  

            No. This is not an instant rebate, rather a tax credit incentive. However, it is a transferable credit, so during the sales process, you could transfer your credit to a car dealer (or charger retailer), which could then immediately discount the sales price accordingly.

               

            10. What if the credit is higher than the amount of tax I owe? Are the credits available in cash, or transferable?    

            Excess tax credits can be refunded to the taxpayer if they exceed their income tax liability. Additionally, Clean Car Tax Credit certificates of eligibility can be sold, exchanged, or transferred to others, with notification required to the Taxation and Revenue Department within ten days of the transaction. 

             

            11. I purchased a used vehicle from a private seller; does my purchase qualify for tax credit?

            To qualify for the tax credit, a person must have purchased the EV (new or used) from a qualified dealer in New Mexico or a registered dealer on tribal lands. For example, you cannot get the tax credit if you purchase the car from an individual.

            12. For used EV purchases, does a car dealer need to provide at least a one-year extended manufacturer’s warranty against defects and repairs?

            A previously owned vehicle must have a market value of twenty-five thousand dollars ($25,000) or less, be certified by the certified by the dealer selling the motor vehicle and have a dealer-provided warranty of at least a one-year against defects and repairs.

             For further questions please email our main office email: emnrd.ecmd@emnrd.nm.gov