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Electric vehicles

Electric Vehicle and Charging Station Tax Credits Face 2025-2026 Phaseouts

Strategic Insights

— 1 min read

Businesses investing in electric vehicles and charging infrastructure have been benefiting from tax credits like s.45W and s.30C. However, these credits face phaseouts in 2025 and 2026, placing urgency on project timelines. Many mid-market companies have not aligned their project timelines with placed-in-service deadlines, risking partial or lost clean energy credits. Wage rules, documentation, and foreign-sourcing bans can disqualify credits, making early compliance checks essential to preserve full tax benefits.

Key Takeaways:

  • S.45W Commercial Clean Vehicle Credit and s.30C Alternative Fuel Infrastructure Credit face phaseouts in 2025 and 2026, respectively.
  • The placed-in-service deadlines for EVs and charging ports are September 30, 2025, and June 30, 2026, respectively.
  • Bonus credits require detailed compliance with wage and apprenticeship standards, and foreign entity of concern rule may limit credit access based on component sourcing.
  • 40% of mid-market tax leaders feel not prepared for the upcoming shift, while 30% are somewhat prepared, and only 5% are fully prepared.
  • Common barriers to full credit access include project delays, inconsistent wage documentation, foreign-sourced components, and disconnection between tax and operations.
  • Planning priorities for 2025 include checking placed-in-service schedules, coordinating with tax teams, reviewing wage and sourcing documentation, and running credit risk scenarios.

Statistics:

  • Up to $7,500 per eligible EV under 14,000 pounds (cars, vans, trucks, etc.) and up to $40,000 per eligible EV over 14,000 pounds (school buses, semi-trucks, etc.) qualify for s.45W Commercial Clean Vehicle Credit.
  • Up to $100,000 per qualified charging port qualifies for s.30C Alternative Fuel Infrastructure Credit.
  • 6% investment tax credit increased to 30% if a taxpayer meets prevailing wage and apprenticeship requirements or exceptions.
  • 40% of mid-market tax leaders feel not prepared for the upcoming shift.
  • 30% of mid-market tax leaders are somewhat prepared for the upcoming shift.

Sources:

  • MGO
  • Mondaq Ltd
  • IRS updates and regulations
  • MGO webinar on tax readiness for the Inflation Reduction Act
  • Inflation Reduction Act of 2022

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