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Federal Tax Incentives: 
Alternative Fuel Vehicle Refueling Property Credit

Background – IRC §30C Alternative Fuel Vehicle Refueling Property Credit (EV Charging Station Tax Credit)

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The Alternative Fuel Vehicle Refueling Property Credit under IRC § 30C applies to qualifying property used for business or investment purposes and is treated as a general business credit under IRC § 38(b). Qualifying property includes electric vehicle (EV) charging infrastructure, bidirectional charging equipment, and other clean-fuel refueling property such as hydrogen, natural gas, liquefied petroleum gas (LPG), and ethanol blends.

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Credit Amount & Limits

The credit equals 6% of the cost of qualifying alternative fuel vehicle refueling property, increasing to 30% if the taxpayer meets the prevailing wage and registered apprenticeship requirements of the Inflation Reduction Act of 2022, Pub. L. No. 117-169, § 13104. The credit is limited to $30,000 per location for business property and $1,000 for property installed at a taxpayer’s principal residence. 

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IRA Enhancements

  • Extended through 2032 under IRA.

  • Added eligibility for bidirectional charging and charging for 2- or 3-wheel EVs.

  • Introduced direct pay under IRC § 6417 for tax-exempt entities and credit transferability under IRC § 6418 for other taxpayers. Pre-filing registration with the IRS is required to claim or transfer the credit.

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Among the changes pursuant to the IRA, the credit is applicable to bidirectional charging infrastructure, including charging equipment for 2 or 3 wheel electric vehicles, that will enable EVs that are plugged in to not only draw energy from the grid, but to supply energy to the grid. Furthermore, the IRA preserved the eligibility for EV charging infrastructure installed for (and owned by) a tax-exempt entity.  

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In general, the IRC § 30C credit incentivizes businesses to install electric vehicle (EV) charging stations or other alternative fuel refueling equipment. Qualifying “alternative fuel” for this credit includes fuel mixtures that are at least 85% ethanol, natural gas, liquefied petroleum gas, or hydrogen; biodiesel or biodiesel mixtures; and electricity used in EV charging stations.

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The IRC § 30C credit may be useful to operating fleets of commercial or government motor vehicles, including refueling or charging stations on their property for commercial or public use (e.g., convenience stores, refueling stations). Moreover, the Alternative Fuel Refueling Property Credit is transferable (potential to be traded in transactions).

 

Location Requirement

​Starting in 2023, property must be installed in an eligible census tract: (1) low-income community per IRC §45D(e) or (2) nonurban area per Census Bureau classification. IRS and Department of Energy (DOE) mapping tools are available for location verification support.

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A “low-income community” is a census tract where

  • (1) the poverty rate is at least 20%; or

  • (2) (i) if the tract is not located in a metropolitan area, the median family income for such tract does not exceed 80%of the applicable statewide median family income or (ii) if the tract is located in a metropolitan area, the median family income for such tract does not exceed 80% of the applicable statewide or metropolitan area median family income.

 

IRC § 30C defines an "urban area" as a census tract designated as such by the U.S. Census Bureau based on the most recent decennial census.  The U.S. Census Bureau publishes the urban and rural classifications on its website.

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For property sold to a tax-exempt entity, such as a school or a hospital, the seller of the property may have been able to claim the credit. If you are the seller of new refueling property to a tax-exempt organization, governmental unit, or a foreign person or entity, and the use of that property is described in IRC §§ 50(b)(3) or (4), you can claim the credit. However, when claiming the credit for the property sold to a tax-exempt entity, current Form 8911 instructions (as of 2025) require written disclosure to the purchaser of the tentative credit amount allowable under IRC § 30C(e)(2).

 

The Alternative Fuel Vehicle Refueling Property Credit allowed under IRC § 30C for any taxable year that is attributable to property of a character subject to an allowance for depreciation shall be treated as a general business credit listed in IRC § 38(b).

 

However, any credit not attributable to depreciable property is treated as a personal credit to pursuant IRC § 30C(d). Any personal credit attributable to non-depreciable property for any taxable year shall not exceed the excess (if any) of the regular tax liability (as defined in IRC § 26(b)) reduced by the sum of the credits allowable under subpart A and IRC § 27, over the tentative minimum tax for the taxable year.

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IRC § 30C(c) provides that the Alternative Fuel Vehicle Refueling Property Credit refueling property has the same meaning as under IRC § 179A(d) but only with respect to the "alternative fuels" listed in IRC § 30C(c).

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Calculation of the Credit

In general, the Refueling Property Credit is equal to the smaller of 30% of the cost of any property that the taxpayer "places in service" as "qualified alternative fuel vehicle refueling property" during the taxable year of $30,000 in the case of a property of a character subject to an allowance for depreciation. See IRC § 30C(a), (b).The year in which property is "placed in service" and whether the property is placed in service as qualified clean-fuel vehicle refueling property are determined under the principles of Treas. Reg. § 1.46-3(d). See IRS Notice 2022-56; IRS Notice 2023-9; Notice 2007- 43.

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This credit limitation of $30,000 per property (subject to the allowance for depreciation) is further restricted to $1,000 per property for "other property" pursuant to IRC § 30C(b)(2). For example, property not subject to depreciation, such as personal-use property installed at a taxpayer’s principal residence, the credit for all "other property" placed in service at your main home is generally the smaller of 30% of the property’s cost or $1,000​​​

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Eligibility Requirements​

To qualify for the IRC § 30C credit, the following general requirements must be met:

  • The property must be placed in service during the tax year (Treas. Reg. § 1.46-3(d)).

  • The original use of the property must begin with the taxpayer (IRC § 179A(d)).

  • The property must not be used predominantly outside the United States (IRC § 30C(e)(3)).

  • For non-business property, installation must occur at the taxpayer’s principal residence (IRC § 30C(c)(1)).

  • Starting in 2023, the property must be located in an eligible census tract, defined as either a low-income community under IRC § 45D(e) or a nonurban area per Census Bureau classification.

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Qualified Alternative Fuel Vehicle Refueling Property​

Under IRC § 30C(c) and IRC § 179A(d), “qualified clean-fuel vehicle refueling property” refers to property (excluding buildings or structural components) that meets the following criteria:

  • Not used predominantly outside the United States (or used predominantly in a U.S. possession under IRC § 168(g)(4)(G)).​

  • Either depreciable property (IRC § 179A(d)) or is installed on property that is used as the taxpayer’s principal residence (within the meaning of IRC § 121)).

  • The original use of the property begins with the taxpayer (IRC § 179A(d)).

  • The property is used for—

    • Storing or dispensing clean-burning fuel into the fuel tank of a motor vehicle propelled by such fuel, at the point of delivery (IRC § 179A(d)(3)(A)); or

    • Recharging electric vehicles at the point of use (IRC § 179A(d)(3)(B)).​

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Clean-Burning Fuels

IRC § 30C(c)(2) defines clean-burning fuels for purposes of IRC § 179A(d) as:

  • Any fuel at least 85% of the volume of which consists of one or more of the following below (IRC § 30C(c)(2)(A)); 

    • ethanol,

    • natural gas,

    • compressed natural gas,

    • liquefied natural gas,

    • liquefied petroleum gas, or

    • hydrogen;

  • Any qualifying biodiesel mixture containing at least 20% biodiesel, which consists of two or more of the following) (IRC § 30C(c)(2)(B)); and 

    • biodiesel (as defined in section 40A(d)(1)),

    • diesel fuel (as defined in section 4083(a)(3)), or

    • kerosene,

    • and at least 20% of the volume of which consists of biodiesel determined without regard to any kerosene in such mixture. For this purpose, any kerosene in a mixture—

      • (i) Is disregarded in determining whether the mixture is a mixture of biodiesel and diesel fuel; and

      • (ii) Is taken into account in determining whether the mixture contains at least 20% biodiesel.

  • Electricity (IRC § 30C(c)(2)(C)).

    • Electricity used to recharge motor vehicles, provided the charging occurs at the point of use (IRC § 179A(d)(3)(B)).

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Basis Reduction & Recapture
Taxpayers must reduce the basis of the property by the amount of the IRC § 30C credit unless they elect out under IRC § 30C(e)(1). If the property ceases to qualify within three years of being placed in service, the credit is subject to recapture under IRC § 30C(e)(5).​

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IRS Links, Notices, & Filing Requirements​
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