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Available Iowa Electric Vehicle Tax Credit & Incentives

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When you’re considering purchasing a car beyond the traditional gasoline-powered models, you’re looking at hybrid vs. electric and other alternative-fuel vehicles in Des Moines. One enticing advantage to make the switch is the Iowa EV tax credits and incentives. What are EV tax credits? They are there to lower your taxable income when you purchase an electric model. Some are rebates instead. You can find available EV tax credits and rebates from the federal government, state government, and even private institutions. Find out more about these Iowa electric vehicle tax incentives below! 

 

Federal EV Tax Credit 

If you’re buying a qualified new EV after after December 31, 2009, you may be able to earn the federal tax credit, which starts at a minimum of $2,500 and can go up to $7,500, depending on the model’s traction battery capacity and gross vehicle weight rating. Other requirements of a qualifying EV also include:

  • Draws propulsion using a traction battery that has at least 5 kilowatt-hours (kWh) of capacity
  • Uses an external source of energy to recharge the battery
  • Has a gross vehicle weight rating (GVWR) of up to 14,000 pounds
  • Meets specified emission standards 
  • Has to be mostly driven in the United States

One thing to keep in mind as you’re trying to see if you can qualify for this EV tax credit is that you must owe a certain income tax near Urbandale in order to possibly earn that amount. 

Iowa EV Tax Incentives 

While Iowa also has some programs, they’re geared towards businesses or entities unlike the federal EV tax credit that is for individuals. Here are the two current Iowa EV tax credit and funding:

Diesel Emission Reduction Project Funding

Government and non-government entities that own and operate diesel fleets and equipment are eligible for this funding from the Iowa Department of Transportation (IowaDOT). They fund purchases for medium- and heavy-duty on-road new diesel, alternative fuel vehicles, or engine repowers and replacements, as well as off-road repowers and replacements. Qualified vehicles and equipment replacement or repower include:

  • Model Year (MY) 2009 or older Class 4-8 school buses, shuttle buses, and transit buses
  • MY 1992-2009 Class 4-7 local freight trucks
  • MY 1992-2009 Class 8 drayage trucks
  • Freight switchers, ferries and tugs, marine vessel shore power, airport ground equipment, forklifts, and port cargo handling equipment

Alternative Fuel Production Tax Credits

The alternative fuel production tax credits or known as the High Quality Jobs Program offers state tax incentives to business projects for the production of biomass or alternative fuels. Possible incentives include:

  • An investment tax credit equal to a percentage of the qualifying investment that is repaid over five years;
  • A refund of state sales, service, or use taxes paid to contractors or subcontractors during construction;
  • An increase of the state’s refundable research activities credit; and
  • A local property tax exemption of up to 100% of the value added to the property.

Private Iowa Electric Vehicle Incentive

You will also find EV incentives from private companies in West Des Moines and nearby area. The prominent one would be MidAmerican Energy’s Plug-In Electric Vehicle (PEV) Rebate. When you buy or lease of a new qualifiying PEV for personal use, you may earn a rebate of $500 from MidAmerican Energy. Here are the qualifications for this rebate:

  • When you’re submitting your application, you are an active MidAmerican residential electric customer in Iowa who receives electricity from MidAmerican to their primary residence and whose account is in good standing.
  • Buy or lease a new electric vehicle with under 3,000 miles between January 1, 2022, and December 31, 2022. Eligible electric vehicles include Battery Electric Vehicles (BEV) or Plug-In Hybrid Electric Vehicles (PHEV). Standard hybrid vehicles, such as the Toyota Prius, are not eligible for this rebate.
  • You have completed registration of your electric vehicle with the Iowa Department of Transportation to your primary residence. The name on the registration must match the primary customer’s name, or spouse name, and address on your MidAmerican residential electric account.
  • You need to provide a copy of an itemized vehicle invoice with a zeroed-out balance, purchase finance agreement or executed lease contract.
  • You also need to provide a copy of the Iowa Department of Transportation registration for the vehicle. Applications for the vehicle registration do not count as proof of registration.
  • You must submit a complete rebate application and all required documentation no later than 5 p.m. on January 31, 2023.

Learn More from Lithia Volkswagen of Des Moines About EV Tax Credit 

After discovering the various federal and Iowa EV tax credits and incentives, find a qualifying model from Lithia Volkswagen of Des Moines if you don’t have one already! We have the new Volkswagen ID.4 and will have future models in our Johnston lot as they’re released. Feel free to contact our finance team for more information about EV tax credits and programs that you may be eligible for!

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