The U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued a Notice of Proposed Rulemaking and additional guidance on the Alternative Fuel Vehicle Refueling Property Credit, as expanded by the Biden-Harris Administration’s Inflation Reduction Act.
The guidance aims to clarify investments in alternative fuel vehicle refueling properties for battery-powered electric vehicle charging and other clean fuel infrastructure such as hydrogen refueling. This initiative is expected to lower transportation costs and increase energy security by making clean vehicles like electric and plug-in hybrids more affordable for Americans.
The Alternative Fuel Vehicle Refueling Property Credit (section 30C) works alongside other credits to create jobs, lower consumer costs, and strengthen America’s supply chains for batteries, critical minerals, and clean vehicles. The section 30C provision offers a tax credit of up to 30% of the cost of installing qualified alternative fuel vehicle refueling property. Individuals can claim up to $1,000, while businesses can claim up to $100,000 per item placed in service in an eligible census tract. Eligible census tracts include low-income communities or non-urban areas, covering approximately two-thirds of Americans. Businesses and tax-exempt entities can receive an enhanced credit if they pay prevailing wages and use registered apprentices for installation.
“The steps we are taking today will help lower transportation costs for Americans and strengthen our energy security,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo. “The Biden-Harris administration is committed to saving Americans money as we grow a clean energy economy, and today’s announcement marks important progress.”
Ali Zaidi, National Climate Advisor to the President, stated: “Building out America’s charging infrastructure will make transportation more affordable, the air around our roads more breathable, and U.S. emissions trajectory more sustainable – all while creating good-paying jobs across America.”
John Podesta, Senior Advisor to the President for International Climate Policy, added: “In order to help more Americans go electric, we need to make sure they can charge their EVs where they live, work, and shop – from inner city neighborhoods to rural areas.”
U.S. Deputy Energy Secretary David M. Turk noted: “Today’s announcement is a key step forward in our efforts to reduce transportation costs for Americans and build out the U.S. domestic clean vehicle supply chain with good paying jobs.”
Treasury’s Office of Economic Policy estimates that owners of electric vehicles will save $18,000 to $24,000 over a 15-year lifespan compared to gasoline vehicles.
The Notice of Proposed Rulemaking proposes rules including defining credit-eligible 30C property as all functionally interdependent components of recharging or refueling property located at or near the fuel delivery point; defining a single item of property; defining energy storage property; and updating Prevailing Wage and Apprenticeship requirements.
Additional materials offer information on calculating total credit eligibility for individuals, businesses, and tax-exempt entities.
Alongside today’s NPRM release is a notice providing updated mapping tools for determining eligible census tracts. The NPRM will be open for public comment for 60 days with a potential public hearing if requested.
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