Electric Honda, Volvo models eligible for vehicle credit

Electric vehicles are becoming more popular, and the IRS has added several 2021 model year Honda and Volvo vehicles to the already growing list of vehicles eligible for the plug-in electric drive motor vehicle credit.

A tax credit of $2,500, plus an additional amount based on battery capacity, up to $7,500 is offered for qualified plug-in electric drive motor vehicles, including passenger vehicles and light trucks, that were purchased and acquired after December 31, 2009.

The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009).

Tesla and certain General Motors vehicles were among the first to qualify for the plug-in vehicle credit, and as of 2020 have been phased out. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

The 2021 Honda Clarity Plug-In Hybrid has now been added to the qualified vehicle list, as have the 2021 model years of Volvo S60, S90, V60, XC40, XC40 Recharge Pure Electric P8 AWD, XC60, and XC90.

To see a listing of all the plug-in vehicles that qualify for this tax credit, as well as the credit amount, please visit the IRS webpage.