If you install qualified vehicle refueling and recharging property in your home or business, you may be eligible for the Alternative Fuel Vehicle Refueling Property Tax Credit. The credit was extended and modified by the Inflation Reduction Act (IRA). The credit allowed is based on the placed-in-service date for the qualifying property.

The credit is available to businesses and individuals that place qualified refueling property into service during the tax year.

To qualify for the credit, refueling property must be used to store or dispense clean-burning fuel or to recharge electric motor vehicles.

In addition, the property must:

• Be placed in service during the tax year
• Have original use that began with the taxpayer
• Be used primarily in the U.S. and U.S. territories 
• If not business or investment use property, be installed on property used as a main home

As of January 1, 2023, qualifying property is limited to property placed in service in eligible census tracts. An eligible census tract is a population census tract that is a low-income community or that is not an urban area.

Also as of this date, the Inflation Reduction Act expands qualified property to include:

• Charging stations for 2- and 3-wheeled electric vehicles (for use on public roads).
• Bidirectional charging equipment (vehicle connected to the grid or V2G)

Likewise, as of that same date, the credit for qualified refueling property subject to depreciation equals 6% with a maximum credit of $100,000 for each single item of property.

Businesses meeting prevailing wage and apprenticeship requirements may be eligible for a 30% credit with the same $100,000 limit.

For qualifying property not subject to depreciation, the credit equals 30% of the cost with a maximum amount of $1,000 per item.

For property placed in service before January 1, 2023 (including personal property), the credit is 30% of the cost of qualified refueling property with a maximum total credit allowed of $30,000 per location for depreciable property and $1,000 per location for all other property.

Partnerships and S corporations must file Form 8911 to claim the credit. All other taxpayers are not required to complete or file the form if their only source for this credit is a partnership or S corporation. Instead, they can report this credit directly on line 1s of Part III of Form 3800, General Business Credit.

The portion of the credit for business or investment use of refueling property is treated as a general business credit carried from the Form 8911 to the Form 3800 and subject to the rules applicable to the general business credit.

The portion of the credit for personal use of refueling property cannot exceed the excess of the regular tax liability reduced by certain allowable credits over the tentative minimum tax (if any) for the taxable year as determined on Form 6251. The personal use part of the credit is carried from Form 8911 to the Form 1040, Schedule 3.

The basis of any refueling property for which a credit is taken must be reduced by the amount of the credit.

The credit is subject to recapture if the property the credit applied for ceases to qualify within 3 full years from the placed-in-service date.