In an effort to encourage motorists to buy eco-friendly electric vehicles and plug-in hybrids, the United States government implemented tax credits and rebates for owners of green cars. It helps offset the initial purchase, as buying electric vehicles usually costs more than gasoline cars, plus requires the installation of home charging units.
If you’re the new proud owner of a Kia Soul EV, congratulations – you’ve just bought one of the best electric vehicles on the market. In addition, you now qualify for some awesome benefits that come with owning an electric car.
Federal Tax Credit
In 2010, federal tax credits came into effect for electric and plug-in hybrid vehicles that were purchased in or after 2010. The credit amount varies from $2,500 to $7,500 based on the car’s battery size.
The Kia Soul EV qualifies for the maximum credit of $7,500. This could be in the form of a tax refund at the end of the year or, alternatively, deducted off the purchase price at the time of buying the car. So with a starting price of $33,950 for the 2016 standard model, you’ll end up paying $26,450 once you deduct the $7,500.
Important to bear in mind, though, is that depending on what your tax bill is at the end of the year, you may not receive the full $7,500. If your tax bill is less than $7,500, you will only be paid that amount. For instance, if you owe Uncle Sam $5,000, that’s all Uncle Sam will refund you. You will not receive the extra $2,500, nor will it be carried over to the following tax year.
State Incentives
In addition to the federal program, there are also dozens of state and regional incentives on electric and plug-in vehicles. Incentive programs vary, so you will have to find out what applies to your state. Credits can come in the form of exemption from inspections, reduced registration fees, lower vehicle tax, or nonmonetary incentives such as access to the carpool (HOV) lane and free parking. In California, for example, people who buy or lease certain electric cars can get a cash rebate up front in addition to the annual federal tax credit.
Manufacturer Rebates
Kia offers several manufacturer-to-customer rebates and incentive programs. When buying your vehicle, be sure to inquire about these. You could benefit from cash rebates directly at the point of sale, low-interest financing, and special leases. Cash rebates can either be given directly to the customer or be used as part of the vehicle’s down payment. Either way, it helps lower the net price of the vehicle.
If you find it all a little confusing, consult an accountant who can help you claim the correct tax credit you qualify for and assist in filing the Qualified Electric Vehicle Credit form. Note that the federal tax incentive program will eventually be phased out as sales of EVs and PHEVs reach the specified cap – which is around 200,000 vehicles sold per manufacturer. So if you haven’t taken the leap to electric yet, visit your Kia dealer now and take advantage of these benefits while they’re still in place.
Photo by Kia
Warranties include 10-year/100,000-mile powertrain and 5-year/60,000-mile basic. All warranties and roadside assistance are limited. See retailer for warranty details.