Illinois Electric Car Tax Credit: EVs & The Prairie State
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Over the years, electric vehicles, or EVs, have become more relevant and of more interest to many people. In fact, according to the U.S. Bureau of Labor Statistics, electric car sales in America have increased from 0.2% of total car sales in 2011 to an impressive 4.6% in 2021. With the recent government regulations and changes in the auto manufacturing industry, many expert forecasts predict a substantial acceleration of EV adoption.
If you’re interested in buying an EV, probably one of your most common questions is about EV tax credits. EV tax credits have been around since 2008 and are designed to incentivize buyers of qualified EVs or PHEVs.
For today’s post, we will talk about the Illinois electric car tax credit. If you’re from Illinois and looking to buy your first EV or PHEV, we highly recommend you keep reading.
Does Illinois Have Electric Car Tax Credit?
Disclaimer: This article is for informational purposes only. After all, we fancy ourselves as car experts, not tax professionals or financial advisers. Before investing in a significant purchase like an EV, we recommend discussing it with your financial and legal advisors first.
One of the Illinoisans’ many burning questions regarding EV tax credits is whether they’re even available at all. Well, we have some good news and bad news. The good news is that, yes, Illinois does have electric car tax credits called the Electric Vehicle Rebate Program. The bad news is that, according to FindMyElectric, the program has run out of funds and is currently not taking new applications.
But it’s not the end of the world. Like many government programs, the rebate program will likely resume once it secures more funding. Therefore, if you’ve just bought an EV or planning to, there’s still merit in learning more about the Illinois electric car tax credit program.
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How Does Illinois Electric Car Tax Credit Work?
Although an Illinois electric car tax credit doesn’t exist per se, buyers of new or used all-electric vehicles are eligible for a rebate under Illinois’ Electric Vehicle Rebate Program, courtesy of the Illinois Environmental Protection Agency (IEPA). The rebate is reasonably generous at $4,000 for individual customers who purchased a new or used electric car.
One of the main requirements (more on this later) is that you must purchase the EV from a licensed Illinois dealership. In addition, the EV owners should hold on to their vehicles for at least 12 months to keep the rebate, disqualifying rented or leased EVs.
Another notable aspect of Illinois’ Electric Vehicle Rebate is that it also includes electric motorcycles, but with a lesser rebate amount of $1,500. However, the motorcycle purchase must be made after July 1, 2022.
To summarize:
- A $4,000 rebate is available to buyers of an all-electric car, SUV, or truck.
- A $1,500 refund is available for buyers of all-electric motorcycles.
However, it’s worth mentioning that the rebate amounts are set to decrease in the future. According to the Illinois Laws and Incentives page, the dates and corresponding rebate amounts are as follows;
- For vehicles purchased between July 1, 2022 – June 30, 2026, the rebate amount is $4,000.
- For vehicles purchased between July 1, 2026 – June 30, 2027, the rebate amount comes down to $2,000.
- For cars purchased beginning July 1, 2028, the rebate amount comes down to $1,500.
To qualify for the rebate, buyers must apply during an open cycle and within 90 days of purchase. The application forms will be available on the Illinois EPA website during an open cycle.
What are the Requirements for Illinois Electric Car Tax Credit?
Eligibility requirements for Illinois’ Electric Vehicle Rebate are as follows but not limited to:
- The buyer must be a resident of Illinois at the time of purchase and when the rebate was issued.
- The EVs must be purchased from an Illinois-based dealer and licensed by the Illinois Secretary of State.
- The EV must not have received a previous rebate under this new Illinois program.
- Only individual customers are eligible for a refund. Businesses, organizations, and other entities that are not individuals are not qualified.
- The rebate amount should not exceed the purchase price.
- The buyer must own the vehicle for at least 12 consecutive months after the purchase date.
- On top of completing the form, applicants must submit four types of documentation: purchase invoice or copy of bill of sale, proof of purchase document (e.g., copy of a canceled check), copy of vehicle registration or temporary permit, and an IRS W-9 or W-8 form.
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What Happens After I Submit an Application?
If your application is denied, you’ll receive a letter of denial in the mail. The letter will describe why your application was rejected, whether you’re ineligible, you have an incomplete application, or the program is closed. However, a rejection doesn’t mean you can’t re-apply in the future and qualify for the rebate.
Conversely, the IEPA will mail you a check with your corresponding rebate amount if your application is accepted. Please keep in mind that this is a rebate program, not a tax credit. Therefore, accepted applicants will receive the money in the mail, as opposed to lowering their tax burden (like with the recent Clean Vehicle Tax Credit Program)
Can I Apply for the Illinois Electric Car Tax Credit Now?
Or rather, the rebate program. As mentioned, the Electric Vehicle Rebate Program application is closed. If you check the rebate page, you’ll be greeted by the following notification:
A rebate application cycle is not currently open. Check back or sign-up to the listserv below for information on the next rebate cycle.
A round of applications is generally on a 3-month window, and the last application round ran from November 1, 2022 – January 31, 2023. Nevertheless, it’s a popular program since funding went dry around the second week of January.
However, all is not lost since the Illinois Electric Vehicle Rebate Act was designed to run for a decade, so applications will open once funding becomes available. We recommend signing up for the EV Listserv Signup at the bottom of the page to receive more information about the program or if funding becomes available.
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