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EV Charger Tax Credits: What You Need to Know

by Nick Versaw Updated February 18th, 2022

EV charger tax credit: boy sitting in the driver's seat

Driving an EV has a lot of perks: zero emissions and no costly gas prices, to name a few. But there are other ways purchasing an electric vehicle can help drivers save a significant amount of money compared to investing in another gas-powered vehicle. 

While the rebates, state tax incentives, and federal tax credits that come with buying an electric vehicle are pretty well known, EV charger tax credits are a bit murkier for drivers interested in purchasing a new EV. Whether you’re planning on driving the latest Tesla or an all-electric pickup truck, you’ll need an EV charger to help you fuel up before you head out on the road. 

According to a June 2021 consumer behavior report by the Fuels Institute and Electric Vehicle Council, the majority of EV owners charge their vehicles at home daily or overnight. The report says that 70-80% of all EV charging occurs at home or at the workplace.

While EVs come standard with a wall-outlet charger, many EV drivers opt to install a Level 2 charger at their home for faster, more reliable charging. Electric vehicle charging stations can be pricey, but there are many state and federal incentive programs that can help drivers save on their purchase.

In this article, we’ll explore the price of home EV charging stations, including installation costs. We’ll also explore how taking advantage of EV charger tax credits can help reduce the total cost of your EV and EV charger purchase.

How Much Do EV Chargers Cost?

Man in suit, carrying groceries while charging his car

For residential customers, the average cost to purchase and install a Level 2 charging station ranges from $600-1,600. This cost may be higher if your home electricity grid requires an update. 

Nearly all new EVs come with Level 1 chargers that are capable of connecting to a standard 120-volt home outlet. However, these chargers are considerably slower than Level 2 chargers. In fact, EVs, on average, attain approximately 124 miles of range in 20 hours of charge time on a Level 1 charger. This slow rate is why the vast majority of EV drivers opt to install a Level 2 charger in their home.                                                                                                                                    

Level 2 “fast chargers” are made by a variety of different electric vehicle supply equipment (EVSE) manufacturers. Level 2 chargers get their power from 240-volt outlets that — depending on the make, model, and battery capacity of your EV — can charge 3-7 times faster than Level 1 chargers.

Home EV Charger Benefits

Having a home charger has many benefits over workplace charging stations and public EV charging infrastructure. Home chargers are guaranteed to be compatible with your EV, don’t have the potential waiting time that public or workplace charging stations sometimes have, and don’t have any extra charges or fees associated with their use. 

The impact a home charger will have on your residential electric bill will vary depending on how much you use your charger, and what type of electric vehicle you have. A battery-electric vehicle (BEV) with a rating of 25 kWh per 100 miles costs approximately $375 dollars per year, or $31.25 per month, to charge at a rate of 10 cents per kWh. 

EV Charging Incentives by State

State-based EV charger tax credits and incentive programs vary widely from state to state. As of 2021, California, Florida, Texas, and Washington account for more than half of all the EVs currently driven in the United States. Here, we’ll outline some the state-based EV charger tax credit and incentive programs in each of these states as of this writing:

  • California: Depending on the county in which they live, residents can take advantage of rebates ranging from $200 to $600 toward the installation of a Level 2 charger. In some locales, such as Sonoma County, residents are eligible to receive a free Level 2 charger that can be connected to Wi-Fi, and they are responsible only for shipping and installation costs.
  • Florida: Depending on the location of their home, residents can receive rebates ranging from $100 to $2,000 off the installation of qualified Level 2 or DC fast charging EVSE.
  • Texas: Qualified customers of local utility companies Entergy and the Southwestern Electric Power Company (SWEPCO) have eligibility for a rebate of $250 towards the purchase of a Level 2 or DC fast charger. Those who rely on United Cooperative Services (UCS) for their power can qualify for a rebate of up to $500 toward the purchase and installation of a Level 2 EVSE.
  • Washington: Residents of Washington can receive a $100 rebate toward non-ENERGY STAR certified EVSE that does not have Wi-Fi capability. Residents who purchase EVSE that is ENERGY STAR certified and Wi-Fi enabled are eligible for a $500 rebate.

Federal EV Charger Tax Credits and Incentive Programs

EV charger tax credit: woman wearing sunglasses charger her car

The federal government also offers drivers a variety of rebate programs that can be used to offset part of the costs to purchase residential EV chargers. As of February, 2022, residents in any state can get an income tax credit to help defray the cost of both EV chargers and EV charger installations. 

This incentive covers 30% of the cost with a maximum credit of up to $1,000. This tax credit can be utilized in conjunction with any rebates or incentive programs available through residents’ home state and home electric utility provider. Furthermore, these federal EV charger tax credits are retroactive and can be applied to any residential EV charger installation going back to 2017.

EV Charger Installation: Things to Consider

Experts recommend you have your home electricity grid surveyed prior to purchasing an EV or an EV charger. EV chargers are powerful machines that require the latest in residential electric infrastructure. They may not be able to run on outdated public utility systems in remote or rural areas, and your home electricity grid may need to be updated if your home is more than 50 years old. According to an August 2021 report, such upgrades can cost between $1,630 and $5,380.

In addition to looking for EV charger tax credits through your state government, be sure to check with your electricity provider or local electricity utility company as well. Many of these providers offer rebate programs toward the purchase and installation of EV charging equipment, which can be combined with Federal rebate programs

These utility-based EV charger rebate programs, combined with other rebates on the purchase of an electric vehicle, can potentially save new EV drivers thousands on their first electric car — whether it’s an all-electric vehicle or plug-in hybrid

Taxpayers who apply for incentives and rebates on their tax return are also advised to contact the IRS to make sure they have all the appropriate paperwork they need to take advantage of the federal rebate programs they may qualify for. 

Charge Ahead and Save With Compare.com

Interested in learning more about how much it costs to charge an electric car and what you can do to save? Compare.com has information about that and many other EV questions you might have while you shop. And when you utilize our EV price comparison tool, you may be able to save even more on your first EV purchase on top of EV charger tax credits


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