Colorado launches new $2,500 tax credit for electric vehicle buyers

Electric vehicle (EV) buyers in Colorado are now eligible to get a new tax credit in effect starting January 1, 2024, to support further EV adaptation.

According to the information, Coloradans who will buy an EV priced at $35,000 or below are eligible for an additional $2,500 tax credit.

Meanwhile, the state is already offering a $5,000 state tax credit that applies to those who purchase or least a new EV with a retail price of up to $80,000.

The addition of a $2,500 tax credit aims at the people who are looking to buy a more affordable EV and takes the overall savings to $7,500 in total taxes.

This tax credit is similar to the federal tax credit, which now has more requirements for a vehicle to qualify in the eligibility section.

Under the new requirements, the EVs must be manufactured domestically, and battery components manufactured or assembled in North America. There are more requirements for this credit mentioned by the IRS.

Also, Read – Here are all of the EVs eligible for $7,500 federal tax credit after January 1, 2024

Carrie Atiyeh, Associate Director for Transportation Fuel and Technology at the Colorado Energy Office said that there’s a limited number of EVs that will qualify for the full $7,500 federal tax credit.

Unlike a federal tax, all taxpaying Coloradans are eligible for this state tax credit based on the price of the EV. Yet, Atiyeh mentioned that this new tax credit will roll back in 2025 and it’s currently exclusive for 2024.

Dealership Programs:

Dealerships can now apply an instant amount of the tax credit to the purchase price of the vehicle at the time of the sale. This will instantly reduce the price of the vehicle and the dealer will get reimbursed by the state Government later on.

This will also cut some hassle for the buyer who used to wait to apply for the tax credit on their income tax return.

Furthermore, the state’s vehicle exchange program is for qualified Coloradans who replace and recycle their old gas vehicle with an EV. Under this program, user electric vehicles are eligible for a $4,000 rebate or $6,000 for a new EV.

(Source  Cbsnews)