How else can you save on an electric vehicle (EV) purchase? We’ve compiled a few helpful links to help you further reduce the cost of purchasing and operating your new EV.
Federal Tax Credit
Up to $7,500
Battery and plug-in hybrid electric vehicles purchased new in 2023 or after may be eligible for an income-based tax credit up to $7,500 from the federal government. Tax credit eligibility depends on multiple factors such as:
- Vehicle MSRP
- Final assembly location
- Battery component and/or critical minerals sourcing
- Your modified adjusted gross income (MAGI)
Visit fueleconomy.gov to check out the breakdown of tax credit amounts.
As of January 1, 2024, the federal income tax credit must be initiated and approved at the time of sale. Dealers are required to provide certain information to vehicle buyers and must submit a time of sale report to the IRS. Read IRS publication 5900 to learn more.
If you lease your EV, the tax credit goes to the leasing entity. However, dealerships often factor the tax credit into the cost of the lease, lowering your down payment or monthly payments. Ask your sales representative how your tax credit will be applied.
Please note, Charge Up New Jersey is not a tax credit program but a separate EV incentive program. For eligibility requirements and applicable deadlines, please see the eligibility guidelines.
Exemption from New Jersey Sales Tax
The New Jersey Legislature allows residents to pay reduced state sales tax on the purchase or lease of a zero-emissions vehicle, which includes BEVs but not PHEVs. With the current sales tax rate at 6.625%, this is a significant incentive that offers hundreds to thousands of dollars off the vehicle cost – at the point-of-purchase.
To apply this incentive at the dealership, the customer must fill out a sales tax Exempt Use Certificate (Form ST-4), which is available from the New Jersey Division of Taxation online. The New Jersey Department of Environmental Protection’s Drive Green website has a list of vehicles that are eligible for the sales tax exemption.
The content provided on this webpage is for general informational purposes only. For the most up to date information regarding federal or state tax information, please visit fueleconomy.gov or dep.nj.gov. Information shared here is not intended, and should not be relied on, for tax advice.