Credits for Electric and Plug-in Hybrid Electric Vehicles in Colorado

 Are you considering purchasing or leasing an electric or plug-in hybrid electric vehicle? If you live in Colorado, you may be eligible for innovative motor vehicle credits offered by the state. These credits can help offset the cost of your environmentally-friendly vehicle and encourage the adoption of alternative fuel technologies. In this blog post, we will discuss the requirements and details of these credits to help you understand how to take advantage of them.

The innovative motor vehicle or innovative truck credits can be claimed by any taxpayer who purchases, leases, or converts a qualifying motor vehicle or truck. Whether you're a Colorado resident or not, as long as the vehicle is titled and registered in Colorado, you can qualify for the credit. However, it's important to note that state and local governments are not eligible to claim these credits.

To qualify for the credits, electric and plug-in hybrid electric vehicles and trucks must meet several criteria, including:

• The vehicle must be new and not previously titled or registered in any jurisdiction.
• The vehicle must be titled and registered in Colorado.
• The vehicle must have a maximum speed of at least 55 miles per hour.
• The vehicle must be propelled to a significant extent by an electric motor.
• The vehicle's battery must have a capacity of at least 4 kWh.
• The vehicle's battery must be capable of being recharged from an external power source.

The amount of the credit depends on the tax year and whether the vehicle is purchased, leased, or converted. For purchased vehicles and trucks, the credit amount is based on weight classification and the tax year. Here's a breakdown of the credit amounts for different vehicle classifications:

• Light duty passenger vehicle: $2,500 to $5,000 depending on the tax year.
• Light duty electric truck (8,500 to 10,000 lbs. GVWR): $2,800 to $7,000.
• Medium duty electric truck (10,000 to 26,000 lbs. GVWR): $4,000 to $10,000.
• Heavy duty truck (greater than 26,000 lbs. GVWR): $8,000 to $20,000.

For leased vehicles and trucks, the credit amount is also based on weight classification and the tax year. Here are the credit amounts for leased vehicles:

• Light duty passenger vehicle: $1,500 to $2,500.
• Light duty electric truck (8,500 to 10,000 lbs. GVWR): $1,750 to $3,500.
• Medium duty electric truck (10,000 to 26,000 lbs. GVWR): $2,500 to $5,000.
• Heavy duty truck (greater than 26,000 lbs. GVWR): $5,000 to $10,000.

To claim the credit, you must file a Colorado income tax return and include all required forms and documentation. This includes a completed Form DR 0617, a copy of the invoice, purchase agreement, or lease agreement for the qualifying vehicle, and, if applicable, Form DR 0618 for financing entities that accept assignment of the credit.

If you choose to assign the credit to a financing entity, they will file a Colorado income tax return and claim the credit on your behalf. The financing entity must compensate you for the full amount of the assigned credit, and the compensation should be clearly stated in the purchase, lease, or loan agreement.