Overview of Section 30C Alternative Fuel Vehicle Refueling Property Credit

Who Qualifies for the Credit

Businesses and individuals who install qualified refueling property during the tax year can avail themselves of a significant tax credit. This initiative is designed to promote the use of clean energy and support the infrastructure required for electric and alternative fuel vehicles.

Eligibility for Qualified Refueling Property

To be eligible for the credit, the refueling property must either store or dispense clean-burning fuels or recharge electric vehicles. Additional criteria include:

• The property must be placed in service during the tax year.
• Its original use must commence with the taxpayer.
• It must primarily be used within the U.S. and its territories.
• For non-business or non-investment use, the property should be installed on the taxpayer's primary residence.

From January 1, 2023, the credit is restricted to properties in eligible census tracts, which include low-income communities or non-urban areas, as defined. Newly qualifying properties now include charging stations for 2- and 3-wheeled electric vehicles and bidirectional charging equipment.

Credit Amounts

The tax credit for depreciable refueling property is 6% of the cost, up to $100,000 per item. Businesses adhering to prevailing wage and apprenticeship standards may qualify for a 30% credit, capped at the same amount. For non-depreciable property, the credit is 30% of the cost, with a maximum of $1,000 per item. For property placed in service before 2023, the credit remains at 30% but with different caps based on the property's use and type.

Claiming the Credit

To claim the credit for the 2022 tax year, taxpayers must use Form 8911, which details and reports the alternative fuel vehicle refueling property credits. Partnerships and S corporations are required to file this form to claim the credit, while other taxpayers who receive this credit through partnerships or S corporations should report it directly on Form 3800, General Business Credit.

Additional Considerations and Updates

The IRS is developing more forms and guidelines for the 2023 tax year, and updates will be posted as they become available. Special rules apply to the business or investment use of the refueling property, such as carrying the credit from Form 8911 to Form 3800 and adhering to general business credit rules. For personal use, the credit cannot exceed certain tax liabilities as calculated on Form 1040, Schedule 3. Additionally, the basis of the property must be reduced by the amount of the credit claimed, and there is a potential for credit recapture if the property ceases to qualify within three years of the service date.