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 or this Legislative Council Staff Issue Brief. 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.
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State Income Tax Credits for Innovative Fuel Vehicles |
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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 |
$2,500 |
$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. For additional information, consult a dealership or this Legislative Council Staff memorandum. 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