What Businesses Should Know about Changes to the 30C Tax Credit
Since 2018, the gold standard of federal tax credits for EV chargers has been U.S. Code 30C, more commonly known as the "Alternative Fuel Infrastructure Tax Credit" or the “30C Tax Credit.” Put simply, it allowed businesses and individuals to receive a tax credit for 30% of the installation costs for any "alternative" fueling equipment, which includes EV chargers.
As of January 1st, 2023, 30C has undergone some changes that business owners should be aware of. To understand the updates to the 30C tax credit, let’s take a closer look at how it benefits businesses now, what has changed and who is eligible to receive the tax credit.
U.S. Code 30C: The Alternative Fuel Infrastructure Tax Credit
When updates to tax code are made, there is a tendency to wonder whether these changes are good or bad; in this overview, we want to avoid reducing the changes to good or bad and instead help you better understand how the changes affect those looking to install EV charging. That being said, for those eligible to receive the 30C tax credit, there is more money available than ever. Let’s take a closer look.
30C Tax Credit: Changing Numbers
From 2023 onward, there will be a change to the amount refunded to eligible business owners via a tax credit. Formerly, the 30C tax credit gave businesses back 30% of eligible costs up to $30,000 per site. This meant that no matter how many ports were installed, the maximum credit remained static because it was on a per site basis. As of 2023, that has changed in a big way.
The updates to the 30C tax credit now make 30% of eligible costs up to $100,000 per charger available to businesses that meet certain census, wage and apprenticeship requirements. Basically, qualified businesses can benefit from a much larger amount of tax credit money.
Other Significant Changes
Now, aside from the increased money available to businesses, there are a couple of other extremely important updates to the 30C tax credit that need to be covered. These other changes help define which businesses can receive this tax credit money as well as what stipulations need to be met in order to receive the full amount. Businesses should be sure to reference the code fully in order to decide whether they are able to benefit from US Code 30C.
Location Eligibility
According to the 30C tax code, there is a location requirement for charging station sites that must be met. Only site locations that are census-designated as low-income or non-urban will qualify for the 30C tax credit. This will have a huge impact on where businesses that plan to benefit from this money can install EV charging stations in order to receive the tax credit.
Wage and Apprenticeship Requirements
Another important change in requirements for the 30C tax credit regards wage and apprenticeship stipulations. Essentially, businesses that want to benefit from the full 30% tax credit must pay contractors and associated labor at the prevailing rate determined by the Secretary of Labor. If businesses don’t meet these wage and apprenticeship requirements, they are only eligible for expenses refunded up to 6% through the tax credit.
Widened Scope
Beyond requirements for the location as well as wage and apprenticeship rates, the new 30C code includes more clarification about what type of charging equipment will qualify. For example, newer technology such as bi-directional charging stations is included in the new scope.
How These Changes Affect Businesses
So, at this point it is natural to ask, how will these 30C changes affect my business? The three key pieces of information to keep in mind are 1) the increase in available money, 2) the low-income or non-urban site location requirements, and 3) the wage and apprenticeship requirements for full eligibility.
As of 2023, if you have a business or a site that meets the low-income or non-urban location stipulations and ensure you meet fair labor standards, you will now be eligible for a 30% tax credit up to $100,000 per charger! That is an incredible increase over the former 30% up to $30,000 per site. Even better: 30C has been extended through December 31, 2032. It is safe to say that for many businesses these updates will have a huge positive impact on the ability to install EV charging stations for years to come.
EV Connect’s products and services are currently approved for over $2.6 billion in active utility and local government incentive programs supporting EV charging for businesses. With the help of the 2023 updates to the 30C tax credit, we’ll boost your business into the new year and beyond.
Contact us today, and we can help you make the most of the available tax credits, rebate programs, and other funding opportunities!
Sources
U.S. Department of Energy - Alternative Fuel Infrastructure Tax Credit
AnswerConnect - Internal Revenue Code 30C
Investopedia - What Is the Tax Impact of Calculating Depreciation?
O’Connor and Drew - Charge Off Part of Your Tax Bill With Electric Vehicle Charging Stations