Alternative Fuel Vehicle Tax Credits
Since 1992, Colorado has offered the innovative motor vehicle income tax credit for people who purchase or lease alternative fuel vehicles, or who convert their existing vehicle to run on an alternative fuel source. Qualifying vehicle types include electric vehicles, plug‑in hybrid electric vehicles, liquefied petroleum gas (LPG) vehicles, and compressed natural gas (CNG) vehicles. The credit is worth up to $5,000 for passenger vehicles and more for trucks. For additional information, consult a dealership. The tax credit for most innovative fuel vehicles is set to expire on January 1, 2022. The table below outlines the tax credits for qualifying vehicles.
State Income Tax Credits for Alternative Fuel Vehicles |
|---|
|
Vehicle Type |
Vehicle Type |
Tax Year 2019 |
Tax Year 2020 |
Tax Year 2021 |
|---|---|---|---|---|
|
Purchased alternative fuel vehicle |
Passenger Vehicles |
$5,000 |
$4,000 |
$2,500 |
|
Light duty trucks* |
$7,000 |
$5,500 |
$3,500 |
|
|
Medium duty trucks** |
$10,000 |
$8,000 |
$5,000 |
|
|
Heavy duty trucks*** |
$20,000 |
$16,000 |
$10,000 |
|
|
Leased alternative fuel vehicle |
Light duty trucks* |
$3,500 |
$2,750 |
$1,750 |
|
Medium duty trucks** |
$5,000 |
$4,000 |
$2,500 |
|
|
Heavy duty trucks*** |
$10,000 |
$8,000 |
$5,000 |
|
|
Passenger Vehicles |
$2,5000 |
$2,000 |
$1,500 |
|
|
Converted alternative fuel vehicle |
Passenger Vehicles |
$5,000 |
$4,000 |
$2,500 |
|
Light duty trucks* |
$7,000 |
$5,500 |
$3,500 |
|
|
Medium duty trucks** |
$10,000 |
$8,000 |
$5,000 |
|
|
Heavy duty trucks*** |
$20,000 |
$16,000 |
$10,000 |
Extension for electric vehicles. The tax credit for electric and plug-in hybrid electric passenger vehicles and trucks, and the credit for hydrogen passenger vehicles, by extending the credit expires January 1, 2026. The table below outlines the tax credits for electric vehicles.
State Income Tax Credits for Electric Vehicles
|
Tax Year
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025
|
|---|---|---|---|---|---|---|
|
Electric Passenger Vehicles
Purchase Vehicles
Leased Vehicles
|
$4,000
$2,000
|
$2,500
$1,500
|
$2,500
$1,500
|
$2,000
$1,500
|
$2,000
$1,500
|
$2,000
$1,500
|
|
Light Duty Electric Truck
Purchased Vehicles
Lease Vehicles
|
$5,500
$2,750
|
$3,500
$1,750
|
$3,500
$1,750
|
$2,800
$1,750
|
$2,800
$1,750
|
$2,800
$1,750
|
|
Medium Duty Electric Truck
Purchase Vehicles
Leased Vehicles
|
$8,000
$4,000
|
$5,000
$2,500
|
$5,000
$2,500
|
$4,000
$2,500
|
$4,000
$2,500
|
$4,000
$2,500
|
|
Heavy Duty Electric Truck
Purchased Vehicles
Leased Vehicles
|
$16,000
$8,000
|
$10,000
$5,000
|
$10,000
$5,000
|
$8,000
$5,000
|
$8,000
$5,000
|
$8,000
$5,000
|
Source: Legislative Council Staff