Key Takeaways
- Section 30C provides a credit for qualified alternative fuel vehicle refueling property.
- The credit is applicable for vehicles placed in service before January 1, 2033.
- The credit is treated as a general business credit under section 38(b).
Section 30C provides a credit for qualified alternative fuel vehicle refueling property placed in service before January 1, 2033. The credit amount for depreciable property has a base credit amount of 6% of the cost of the qualified property. There is also a bonus credit amount of 30% of the cost of the qualified property placed in service if the prevailing wage and apprenticeship requirements are met.
The Section 30C credit is limited to $100,000 in the case of property subject to depreciation or $1,000 otherwise. The credit is treated as a general business credit under section 38(b).
Qualified Alternative Fuel Vehicle Refueling Property
To be considered a qualified alternative fuel vehicle refueling property, the property must be placed in service in an eligible census tract. An eligible census tract is a low-income community as defined under section 45D(e) or not in an urban area.
Qualified alternative fuel vehicle refueling property must be subject to depreciation and original use must begin with the taxpayer. The property must be used for the storage or dispensing of a clean-burning fuel into the fuel tank of a motor vehicle propelled by such fuel, or for the charging of motor vehicles propelled by electricity.
A clean-burning fuel is defined as at least 85% by volume of one or more of:
- Ethanol
- Natural gas
- Compressed natural gas
- Liquified natural gas
- Liquefied petroleum gas
- Hydrogen
- Any mixture which consists of two or more of biodiesel (if at least 20% of the volume is biodiesel), diesel fuel, or kerosene
- Electricity
Also included are bidirectional charging stations for motor vehicles propelled by electricity that allow for discharging electricity from batteries to an external electric load.
Costs Included in Determining the Credit
Generally, the costs included in determining the credit are all costs required under federal tax principles to be capitalized as a cost of the property. These include the cost of acquiring or constructing the property or of converting conventional refueling property into qualifying property.
Costs not included are those that are properly allocable to land or to a building and its structural components. These include, but are not limited to, costs related to the acquisition of land on which the qualifying property is located and expenses for permits, legal fees, project management, or engineering to the extent such expenses are related to the land.
Limitations of Section 30C
The credit allows for any single item of qualified property placed in service during the taxable year. The credit is limited to $100,000 in the case of property subject to depreciation or $1,000.
How to Claim the Section 30C Credit
Section 30C is claimed using Form 8911 and Form 3800.
How to Monetize the Credits
Section 30C credits are able to be monetized under Section 6417 Direct Pay and Section 6418 Transferability, as applicable to the entity claiming the credits.
Take Advantage of the Section 30C Credit
Section 30C is another benefit enhanced by the Inflation Reduction Act. This, as well as several other energy incentives, are designed to support clean energy opportunities for taxpayers. Eide Bailly can help you sort through which of these energy efficiency incentives may be beneficial to you.
Stay Up to Date on the Latest Tax News
Business Credits & Incentives
Benefit from available tax credits and deductions to help maximize tax savings.