Treasury Releases Proposed Rule on Vehicle Recharging Equipment Tax Credit

On September 18, 2024, Treasury released a notice of proposed rulemaking (NPRM) and additional guidance on the Alternative Fuel Vehicle Refueling Property Credit, IRC section 30C, expanded by IRA section 13404. The NPRM provides clarity on qualifying investments for battery-powered electric vehicle charging as well as hydrogen refueling infrastructure, including defining energy storage property and updating the prevailing wage and apprenticeship requirements.

The section 30C credit provides a tax credit for up to 30% of the cost of installing qualified alternative fuel vehicle refueling property, such as chargers and hydrogen refueling property. The credit limit is $1,000 for individuals and $100,000 for businesses for each single item of property placed in service in an eligible census tract. Eligible census tracts, covering about two-thirds of Americans, are low-income communities or non-urban areas. The credit may also be claimed by tax-exempt and governmental entities using elective pay. Business and tax-exempt governmental entities claiming the Alternative Fuel Vehicle Refueling Property Credit can receive an enhanced credit if they are paying workers prevailing wages and using registered apprentices to install the equipment.

Treasury and IRS also released a notice that provides updated mapping tools taxpayers can use to determine their eligible census tracts.

The NPRM will be open for public comment until November 18, 2024, and a public hearing will be scheduled if requested.