The E.V. Credit Many New Tesla Owners Forget

I'm happy that we found our tax accountant. Jim is very sharp and stays current on the latest tax rules. But new E.V. owners must remember to claim one little tax credit: their home charger and installation expense. That is separate from the tax incentive that car buyers receive when they purchase or lease an electric vehicle.

My accountant, Jim, asked me, "Tom, I see you listed that you bought a new electric vehicle, a Tesla Model Y."

I replied, "Unfortunately, I bought it in December last year. I would have missed the E.V. tax credit if I had just waited a month and received it in January. I would have been eligible for the 2023 Federal E.V. credit. I was worried that Tesla would increase their prices again, so I placed my order anticipating another price increase. My stupid luck, they lowered their prices a week after I took delivery."

Jim looked at me and said, "Then Tesla lowered their prices again in January."

"Jim, don't remind me; the one thing I regret about buying my Tesla is I didn't wait the lousy three months."

"How do you like the car?" Jim asked.

Without hesitation, I blurted out, "I love my Tesla. My kids got a kick out of the Boombox mode."

"Boombox Mode?" Jim asked with a puzzled look.

"It is pretty awesome. My Tesla turns into a giant boombox and starts playing music. And it is loud and crisp. And the Bass is pounding deep. My son wanted to play it very loud at nine o'clock at night. He was skeptical about me buying the Tesla but was impressed with that feature. He wants to use my Tesla at his fraternity's next college tailgate party."

"Are you going to let him?"

"Hell no! I can see some drunken college kid trying to jump up and down on top of my hood. I don't want any beer spills or damn dents on my baby."

"Anyway, Tom, at least I see a silver lining in your E.V. purchase. We can deduct the Tesla charger, the new wiring, the circuit box, and the installation of your new charger."

"What? I can claim the Tesla charger and installation?" My eyes almost popped out of my head. "The charger and adapter cost me $600, and the electrical wiring and installation cost another $3000. Jim, I know the installation was a lot, but my house is old, and my circuit box is at one end of my house, the garage is at the other, and I have a finished basement. It was a nightmare for them to lay that thick wiring from the circuit box to the garage. I wanted to install my charger outside, but it saved me some money to put it inside the garage. They also charged me by the foot for the wiring and installation. How much of a tax credit can I get?

Jim picked up his notepad and flipped through his notes. He rocked his head from side to side and said, "In the ballpark, about $500 to $600. That's off the top of my head. I need to go over the calculations again. E.V. chargers and installations are covered up to 30% of the cost and capped at $1000. The federal tax credit was in effect in 2022 and is in effect in 2023."

I smiled from ear to ear because I had done something clever.

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