Research | Policy Briefs
Inflation Reduction Act of 2022
30C
30C Alternative Fuel Vehicle Refueling Property Credit
(IRA Section 13404)
Background
The 30C tax credit was originally established in the Energy Policy Act of 2005 and has been amended several times. Prior to the Inflation Reduction Act, eligible taxpayers could qualify for a tax credit of up to $30,000 per site, but the IRA increased the credit to 30% up to $100,000 for taxpayers who meet prevailing wage and apprenticeship (PWA) requirements.
What is it?
The 30C Alternative Fuel Vehicle Refueling Property Credit (IRA Section 13404): offers a tax credit for alternative fuel (i.e. electricity, ethanol, natural gas, hydrogen, biodiesel, etc.) vehicle refueling and charging property in low-income and rural areas.
For businesses, the amount is 6% of the cost, limited to $100,000 per item
For individuals, the amount is 30% of the cost, limited to $1000 (Note: Businesses can claim a 30% credit for projects meeting PWA requirements.)
What types of projects/businesses are eligible?
Businesses, tax-exempt organizations, and individual consumers are all eligible for the 30C tax credit, provided they meet key requirements:
Taxpayers are eligible for the tax credit if the relevant refueling property is used to store or dispense clean-burning fuel. The Inflation Reduction expanded the definition of qualified property to include 1) charging stations for 2- and 3-wheeled vehicles (for use on public roads) and 2) bidirectional charging equipment (vehicle-to-grid).
The location in which the refueling property is installed must satisfy the definition of “low-income community” or rural area below:
Low-income community [from IRC section 45D(e)]: any population census tract where (A) the poverty rate is at least 20%, or (B) (i) in the case of a tract located outside a metropolitan area, where the median family income does not exceed 80% of statewide median family income, or (ii) in the case of a tract within a metropolitan area, the median family income does not exceed 80% of the greater of statewide median family income or the metropolitan area median family income.
Rural area [from US Census Bureau]: all population, housing, and territory not included within an urban area, which encompasses at least 2,000 housing units or has a population of at least 5,000. The US Census Bureau maintains a database of urban areas based on the 2020 Census.
How do businesses take advantage of it?
The 30C tax credit is available to taxpayers who place alternative fuel vehicle refueling and charging property into service between January 1, 2023 to December 31, 2032. The IRS is currently finalizing forms, instructions, and guidance for different types of taxpayers, including partnerships and S corporations, for the 2023 tax year.
Will the government be sending out future additional guidance?
The IRS is expected to release the relevant tax forms and guidance for claiming the tax credit for the 2023 tax year prior to April 2024.
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