Dec. 1, 2020 – Thinking of buying an electric vehicle? If so, it’s worth your while to start kicking tires asap.
That’s because Colorado’s “Innovative Motor Vehicle” income tax credit is set to decrease significantly in 2021. Currently, you’ll get $4,000 back on the purchase of any plug-in hybrid or all-electric vehicle – but after Dec. 31, the credit goes down to $2,500.
In other words, buy by Dec. 31 and put $1,500 back in your pocket.
(If you’re leasing, the 2020 tax credit is $2,000, and it will drop to $1,500 in 2021.)
The great thing about the state tax credit is that it’s fully refundable. That means you’ll get the full amount, no matter what your state tax bill is. The state of Colorado is literally paying you $4,000 to buy an EV, or $2,000 to lease it. Be sure to ask the dealer if they can apply the credit directly to your sale price; if not, you’ll have to wait till you file your 2020 taxes.
There’s also a federal tax credit of up to $7,500. However, not all models qualify for the federal credit, and there are other factors that can reduce the size of your credit. (More info on that here.)
On top of that, some of our local dealerships are offering great discounts on their EVs in stock. Here’s a rundown: