Find Out if Your EV Fueling Station Is Eligible for a Tax Credit

The IRS issued Notice 2024-20, which details geographical requirements for alternative fuel vehicle refueling credit property for taxpayers or entities installing electric vehicle (EV) charging stations pursuant to Internal Revenue Code Section 30C.

Issued on January 19, 2023, the notice provides taxpayers with a list of eligible census tracts and helps with determining if IRC Section 30C property is in an eligible census tract. The notice also clarifies the interaction between Section 30C and Section 45D as they relate to eligible census tracts.

View eligibility details and more to see if you may be able to leverage this opportunity.

Who Can Use this Opportunity

This opportunity applies to all taxpayers considering installing EV charging stations or other alternative fuel vehicle refueling property under the Inflation Reduction Act that wish to claim the credit on their federal income tax return or that wish to transfer, either through the sale or purchase, the credits.

In addition, this opportunity applies to applicable entities, such as government entities, not-for-profit, and Tribes, considering elective pay, also known as direct pay, from the installation of EV charging stations or other alternative fuel vehicle refueling property under the Inflation Reduction Act.

Background on Alternative Fuel Vehicle Refueling Credit Property

Under the Inflation Reduction Act, IRC Section 30C was modified to provide for as much as a 30% credit for installing alternative fuel vehicle refueling property, such as EV charging stations, up to $100,000.

IRC Section 6417 was also added to provide a mechanism where applicable entities, such as Tribes, governmental entities, or not-for-profit entities, could receive the credit generated under Section 30C via a mechanism referred to as elective payment or direct pay.

New Location Requirements for an Alternative Fuel Vehicle Refueling Credit Property

To be treated as qualified alternative fuel vehicle refueling property for purposes of claiming the credit, the property must be in an eligible census tract.

An eligible census tract is either:

  • A qualified low-income community census tract as set forth in IRC Section 45D(e) for purposes of the New Markets Tax Credit
  • A nonurban census tract

Determining Census Tracts and Urban Areas

The US Census Bureau determines census tracts, which are largely delineated based on population and housing density within a given area. These boundaries generally follow visible and identifiable features and don’t generally change between each decennial census, though they could be due to legal changes in the geographic area. The Census Bureau provides mapping files each year to reflect census tract changes.

The Census Bureau also determines urban areas based on densely developed territory encompassing residential, commercial, and other nonresidential urban land uses. These are delineated after each decennial census.

Determining Qualifying Census Tracts

Notice 2024-20 provides guidance on qualifying census tracts for low-income communities and nonurban areas. Each census tract is assigned a GEOID, an 11-digit geographic identifier, by the Census Bureau.

Low-Income Community Census Tracts

IRC Section 45D(e) sets forth qualifying low-income census tracts for purposes of the New Markets Tax Credit (NMTC), which is jointly administered by the IRS and the Community Development Financial Institutions (CDFI) Fund.

Before September 1, 2023, NMTC low-income census tracts were based on 2011–2015 census data but were updated on September 1, 2023, to reflect 2015–2020 census data.

The guidance for IRC Section 30C provides that projects placed in service before January 1, 2025, may rely on either the 2011–2015 or the 2016–2020 census data. Thereafter, projects placed in service after January 1, 2025, must rely on the 2016-2020 data until further updated low-income census tract data is released by the CDFI Fund.

Nonurban Census Tracts

The guidance defines nonurban census tracts as those census tracts, based on 2020 boundaries, in which at least 10% of the census blocks aren’t designated as urban areas.

Those nonurban census tracts will remain the same until the Census Bureau makes updates based on the 2030 census.

How to Determine Whether EV Charging Station Property Is Located in an Eligible Census Tract

Appendix A and Appendix B can be used to identify Section 30C eligible census tracts based on the relevant GEOID.

Appendix A lists eligible low-income community census tracts based on the 2011–2015 census data and the relevant 11-digit census tract GEOID.

Appendix B lists eligible low-income community census tracts based on the 2016-2020 census data and eligible nonurban census tracts based on the relevant GEOID.

Taxpayers can determine their relevant GEOID based on 2015 and 2020 census tract boundaries by using the CDFI Fund mapping tool. The relevant GEOID based on 2020 census tract boundaries can also be found based coordinates. The U.S. Department of Energy has also published a 30C Tax Credit Eligibility Locator to assist in determining whether a location sits within an eligible Census Tract, but it cannot be relied on as formal IRS guidance.

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If you have questions about this guidance or other related concerns, contact your Moss Adams professional.

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