Electric & Hybrid Tax Credits by State (Updated for 2022)

In my most fuel efficient cars and cheapest electric cars articles, I highlighted the Mini Cooper Electric Hardtop as one of the top eMPG vehicles in the U.S. market and it comes in well below $30K. But a key component of that cost is the U.S. federal tax credit of $7,500 knocking the net price down from around a $30,000 MSRP to the low $20K range. I mentioned that some states further offered additional tax incentives on top of the federal credit, which prompted a reader to ask for a list of those states.




It was a great question. Without the tax incentives these vehicles just don’t make sense economically. With them, there is a chance they could actually make you money back by saving hundreds, if not thousands a year on fuel and maintenance costs. And if you can also sleep better at night for the added environmental benefit, why wouldn’t you?

Let’s first take a look at the federal tax credit and which vehicles can claim it.

state electric vehicle tax credits

Federal Electric Vehicle Tax Credit

Electric vehicle and hybrid tax credits are fairly straightforward at the federal level.

For starters, non-plugin hybrid tax credits no longer exist at the federal level.

Electric vehicles are eligible for up to a $7,500 tax credit, with a few caveats:




  1. It must be purchased in or after 2010.
  2. You must be the original owner.
  3. To get the full credit, the vehicle must be within the first 200,000 of that automaker’s electric vehicles produced in the U.S. market (then phase-out occurs).

On that last point, GM and Tesla’s electric vehicle tax credits have already been phased out entirely, as of the start of 2020, with GM vehicles purchased after 3/31/20 and Tesla vehicles purchased after the end of 2019 no longer eligible for partial credits.

You can see a full list of requirements and eligible vehicles at the Fueleconomy.gov electric vehicle tax credit site.

Additionally, don’t forget about federal energy tax credits. There are significant solar tax credits available through 2023.

State Electric Vehicle Tax Credits

Now comes the tricky part. Each state has slightly different electric and hybrid tax credits and incentives. I’ll highlight what I was able to dig up for 2021 and 2022, but you will need to do some further digging and check with your state to make sure these incentives still apply, as they change frequently, and often depend on state funding per year. If your state is not listed, my research came up empty. If I missed something in your state, let me know and I’ll add it.

California

Rebates were available through the Clean Vehicle Rebate Project (CVRP) for the purchase or lease of qualified vehicles, which include eligible zero-emission plug-in hybrid, battery EV, and fuel cell light-duty vehicles. They’ve also increased the standard rebate for households that are below federal poverty guideline levels. Below is a summary, but check out their full guidelines for more details.

Type of Vehicle Standard Rebate Increased Rebate Total Rebate
Plug-in Hybrid EV $1,000 $2,500 $3,500
Battery EV $2,000 $2,500 $4,500
Fuel Cell EV $4,500 $2,500 $7,000

Colorado

Colorado’s electric vehicle tax credits have been extended with a phaseout in place for purchases of electric vehicles in the following years:

2021-2022:

  • light duty passenger vehicle: $2,500
  • light duty electric truck: $3,500
  • medium duty electric truck: $5,000
  • heavy duty electric truck: $10,000

2023-2025:

  • light duty passenger vehicle: $2,000
  • light duty electric truck: $2,800
  • medium duty electric truck: $4,000
  • heavy duty electric truck: $8,000

Lease credits are less. More info can be found here.

Connecticut

The Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) offers rebates for Connecticut residents who purchase or lease a new eligible electric, fuel cell electric, or plug-in hybrid electric vehicle. They also recently added increased credit amounts (called “Rebates+”) for those who meet lower income criteria. See the full FAQ for more details. The following amounts are for June 2, 2021 – December 31, 2022, or until program funds are fully exhausted.

Standard Rebate Rebate+ Total Rebate
Plug-In Hybrid Electric Vehicle (PHEV) $750 $1,500 $2,250
Battery Electric Vehicle (BEV) $2,250 $2,000 $4,250
Fuel Cell Electric Vehicle (FCEV) $7,500 $2,000 $9,500

Delaware

The state of Delaware is offering electric vehicle cash rebates totaling up to $2,500 depending on vehicle type. The program was extended through 2021 and applies to vehicles purchased or leased before June 30, 2022. The rebate must be applied for within 90 days of the purchase date. Purchase price cannot exceed $60,000.

Rebates are as follows:

Vehicle Type Rebate
New Battery Electric Vehicles (including vehicles with gasoline range extenders) $2,500
New Plug-in Hybrid Electric Vehicles* $1,000
New Dedicated Propane or Natural Gas Vehicles $1,500
New Bi-Fuel Propane or Natural Gas Vehicles $1,350

Maine

Maine offers electric vehicle tax rebates that vary based on your income level and whether the vehicle is all-electric, plug-in, and new or used.

The standard rebate is:

  • 100% battery: $2,000
  • plug-in hybrid: $1,000

For qualified low-income:

  • new 100% battery: $5,500
  • new plug-in hybrid: $4,000
  • used 100% battery: $2,500
  • used plug-in hybrid: $2,500

Must be purchased or leased on or after August 29, 2019, and prior to the date of the Program’s termination, as noticed to Participating Dealers and on the Efficiency Maine website, or June 30, 2022, whichever comes first.

Massachusetts

The Massachusetts Department of Energy Resources has a program called Massachusetts Offers Rebates for Electric Vehicles (MOR-EV), which offers incentives of up to $2,500 for the purchase or lease of new electric vehicles, including battery and fuel-cell electric vehicles and up to $1,500 for plug-in hybrid electric vehicles. Purchase price must be $50,000 or less.

New Jersey

Zero-emission vehicles sold, rented, or leased in New Jersey are exempt from state sales and use tax. This exemption is not applicable to partial zero emission vehicles, including hybrid electric vehicles. The definition of “sale” in the law includes rentals and leases. The exemption is applicable to the sale, rental or lease of a new or used zero emission motor vehicle on and after May 1, 2004.

The New Jersey DOT has more info.

New York

New York offers tax rebates for new electric vehicles, as follows:

  • Range: > 200 miles: $2,000
  • Range: 40 to 199 miles: $1,000
  • Range: <40 miles: $500
  • Electric vehicles > $42,000 MSRP: $500

Oklahoma

For tax years beginning before January 1, 2020, Oklahoma provides a one-time income tax credit of 45% of the cost of converting a motor vehicle to operate on certain alternative fuels, or for 45% of the incremental cost of purchasing a new Original Equipment Manufacturer (OEM) AFV. The state will allow an income tax credit of 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as an income tax credit has not been previously taken on the vehicle.

Oregon

As of late 2019, Oregon’s electric vehicle rebates are:

Standard Rebate:

  • $2,500 towards the purchase or lease of a new plug-in hybrid electric vehicle or battery electric vehicle with a battery capacity of 10 kWh or more.
  • $1,500 towards the purchase or lease of a new plug-in hybrid electric vehicle or battery electric vehicle with a battery capacity of less than 10 kWh.
  • $750 towards the purchase or lease of a zero-emission electric motorcycle.

Additionally, starting in 2022 is an increased income-based “Charge Ahead” rebate:

Charge Ahead Rebate for the purchase or lease of a new or used battery electric or plug-in hybrid electric vehicle. To qualify for the Charge Ahead rebate, the purchaser or lessee must be from a low- or moderate-income household. For purchases or leases prior to Jan 1, 2021, the income requirements vary by where you live in Oregon and are based on household size. For purchases on or after Jan 1, 2021, the income requirement is up to 400% of the federal poverty guideline.

For the Charge Ahead rebate option:

  • On or after Jan. 1, 2022: $5,000 towards the purchase or lease of a new or used battery electric or plug-in hybrid electric vehicle.
  • Prior to Jan. 1, 2022: $2,500 towards the purchase or lease of a new or used battery electric or plug-in hybrid electric vehicle. Standard and Charge Ahead Rebates can be combined for up to $7,500 toward the purchase or lease of a new, eligible vehicle.

Pennsylvania

Pennsylvania now offers the following rebates:

New vehicles with final purchase price of $50,000 or less (purchase or lease):

$1,000 rebate on:

  • Hydrogen fuel cell vehicle

$750 rebate on:

  • Battery electric vehicle

$500 rebate on:

  • Plug-in hybrid electric vehicle
  • Compressed natural gas vehicle
  • Propane fueled vehicle
  • Electric motorcycle (Does not include electric scooters

An additional $1,000 is available to applicants who meet low-income requirements. For details, see Alternative Fuel Vehicle Rebate Guidelines.

Texas:

New, starting in late 2021, Texas is offering a $2,500 rebate for EVs purchased through 2022. Only vehicles purchased on or after September 1, 2021 from a dealer licensed to sell or lease vehicles in Texas are eligible. Review the notice of rebates and the  for additional eligibility criteria.

Vermont:

Vermont relaunched its electric vehicle credits Nov. 5, 2020. Credits are 25% of the purchase price, up to $5,000 for income-eligible Vermonters purchasing or leasing a new electric vehicle, so long as funding remains.

Let me know if I missed anything!

Electric Vehicle State Tax Credit Discussion:

If you live in one of these states are these incentives, matched with the federal credit enough to make you consider an electric vehicle purchase?

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