Colorado electric vehicle tax credits, rebates and incentives

The Colorado Department of Revenue offers the Innovative Truck Tax Credit, up to $12,000 for the purchase or lease of an eligible new all-electric, plug-in hybrid, or hydrogen fuel cell electric vehicle. To qualify:

• Credit amount for qualifying vehicle purchase or lease beginning on or after 1/1/2025 but prior to 1/1/2026: $12,000.
• Gross Vehicle Weight Rating greater than 10,000 lbs., but not more than 26,000 lbs.
• Motor vehicle must be titled and registered in Colorado to qualify for the credit.
• The motor vehicle or truck must be new and not previously titled or registered in any jurisdiction.

Additional information:

• Purchaser or lessee may assign the entire allowable credit to a financing entity or motor vehicle dealer. Administration fee may apply.

To learn more, visit https://tax.colorado.gov/income-tax-topics-innovative-truck-credit

Under the Inflation Reduction Act of 2022, the Internal Revenue Service (IRS) offers taxpayers a Clean Vehicle Tax Credit of $3,750 or $7,500 depending on model eligibility for the purchase of a new plug-in electric vehicle. Beginning January 1, 2024, Clean Vehicle Tax Credits may be initiated and approved at the point of sale at participating dealerships registered with the IRS. Dealers will be responsible for submitting Clean Vehicle Tax Credit information to the IRS. Buyers are advised to obtain a copy of an IRS "time of sale" report, confirming it was submitted successfully by the dealer. To be eligible:

• A vehicle must have undergone final assembly in North America (the United States and Puerto Rico, Canada, or Mexico).
• Critical mineral and battery component requirements determine credit amount.
• Maximum MSRP of $55,000 for cars and $80,000 for SUVs/trucks/vans.
• Income eligibility applies depending on modified adjusted gross income (AGI) and tax filing status.

To learn more, visit https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

Funded by the Colorado Community Access Enterprise, the Vehicle Exchange Colorado (VXC) program offers $6,000 to income-eligible residents for the replacement of their old or high-emitting vehicles. Applicants with approval will receive this incentive at point-of-sale through participating authorized dealers for the purchase or lease of a qualified new Battery Electric Vehicle (BEV) or Plug-in Hybrid Electric Vehicle (PHEV). To qualify:

• Must complete a VXC rebate application and receive approval before rebates are issued.
• Income and household size must be below 80% of the area median income in an individual's county of residence.
• May qualify if showing proof of enrollment in eligible state or federal assistance programs.
• MSRP of new vehicle must be $80,000 or less.
• If leasing, lease term must be a minimum of two years.
• Model year of old or high-emitting gas or diesel vehicle must be at least 12 years old; if vehicle fails an emissions test in Colorado, no model year requirement.
• Vehicle must be currently titled and registered in Colorado without lien in the name of participant.
• Participant must be a Colorado resident, 18 years or older.
• Only one VXC rebate is allowed per tax household.

Additional information:

• Can be combined with Federal or State Tax Credits, but participant must verify combinability if applying for other EV offers for same vehicle purchase or lease.

For additional details and to apply, visit https://energyoffice.colorado.gov/vehicle-exchange-colorado