30C Alternative Fuel Vehicle Refueling Property Credit
§30C ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT
The §30C Alternative Fuel Vehicle Refueling Property Credit is a federal tax incentive designed to promote the adoption of clean energy transportation in the United States. Introduced under the Energy Policy Act of 2005 and significantly expanded by the Inflation Reduction Act of 2022 (IRA), this credit aims to reduce the financial burden of installing infrastructure for alternative fuel vehicles, such as electric vehicle (EV) chargers or hydrogen refueling stations. By supporting businesses and tax-exempt entities in building this infrastructure, the §30C Credit plays a key role in advancing energy security, lowering transportation costs, and reducing greenhouse gas emissions—particularly in underserved low-income and non-urban communities.
§30C ELIGIBILITY CRITERIA
The §30C Credit applies to “qualified alternative fuel vehicle refueling property” installed between December 31, 2022, and January 1, 2033. Here’s what qualifies:
- Eligible Property
- Equipment for storing or dispensing alternative fuels.
- Any fuel at least 85 percent of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen.
- Any mixture consisting of two or more of the following: biodiesel, diesel fuel, or kerosene and consisting of at least 20% by volume biodiesel.
- Recharging property, like EV chargers, that powers electric motor vehicles.
- Associated components, such as charging ports, or fuel dispensers directly tied to the refueling or recharging process.
- Equipment for storing or dispensing alternative fuels.
- Location Requirements
- The property must be placed in service in an eligible census tract, defined as either a low-income community (per the New Markets Tax Credit guidelines) or a non-urban area (where at least 10% of census blocks are not urban, based on IRS guidance).
- Who Can Claim It
- Businesses: For depreciable property used in a trade or business (e.g., a commercial charging station).
- Tax-Exempt Entities: Organizations like governments, nonprofits, or tribal entities can claim it via “elective pay” (direct pay), a new feature under the IRA.
- Key Conditions
- The property must be new (original use begins with the taxpayer) and installed in the U.S. or its territories under specific ownership rules.
- Meeting the prevailing wage and apprenticeship (PWA) requirements can boost the credit significantly.
CALCULATING §30C CREDIT
The credit amount depends on the type of property and whether certain conditions are met. Here’s the breakdown:
- For Businesses
- Base Credit = 6% of the cost of depreciable property.
- Enhanced Credit = 30% if PWA requirements are met (paying workers prevailing wages and using apprentices for a portion of the labor).
- Maximum: $100,000 per single item of property.
- Example: A business installs a charging station with two ports costing $150,000 total. If PWA is met, each port (a “single item”) qualifies for 30% of its allocated cost, up to $100,000 each. If costs are split evenly ($75,000 per port), the credit is $22,500 per port, totaling $45,000.
- Cost Considerations
- Includes the price of the equipment and directly attributable installation costs (e.g., wiring or a pedestal for a charger).
- Excludes costs like land acquisition or unrelated building improvements.
- Single Item Rule
Each charging port, fuel dispenser, or energy storage unit counts as a separate item, allowing multiple credits per location if applicable. - Elective Pay for Tax-Exempt Entities
Eligible entities can receive up to $100,000 per item as a direct payment from the IRS, provided they notify the seller in writing of their intent to claim it this way.
The credit reduces your tax liability dollar-for-dollar and, for businesses, is part of the general business credit.