Incentives for EVs and Charging Equipment

State Incentives for New EVs

New EVs may be eligible for a state income tax credit of up to $3,000. The state tax incentive is not applied at point of purchase but may be claimed for the year in which the vehicle is placed in service. The full credit can only be claimed for new EVs if a business’s tax bill is $3,000 or higher. If a business’s tax bill is lower, the State of Maryland will not issue a refund for an amount higher than the business’s tax liability figure. Any unused tax credit cannot be applied to future years’ taxes.

Qualifying EVs cannot exceed a sale price of $50,000. In addition, vehicles must have a battery capacity of at least 5 kWh. The credit is limited to 10 vehicles per business. Vehicle qualifications and instructions on how to apply for the tax credit may be found at: https://mva.maryland.gov/vehicles/Pages/27300-71T.aspx.

State Incentives for EV Charging Stations

Businesses may be eligible for a rebate from the Maryland Energy Administration (MEA) for the purchase and installation of eligible EV chargers. The rebate may cover 50% of the costs to purchase and install eligible EV chargers, not to exceed $5,000 per EV charger for businesses. Qualifications and information on how to apply for the rebate may be found at: https://energy.maryland.gov/transportation/Pages/incentives_evserebate.aspx.

State Emissions Inspection Exemption

Cars and trucks powered exclusively by electricity are exempt from Maryland vehicle emissions inspections. More information may be found at https://mva.maryland.gov/about-mva/Pages/info/58000VEI/58000-06T.aspx#appendix_c

The One Big Beautiful Bill signed by President Trump ends tax credits for electric vehicles. EVs purchased after September 30, 2025 will no longer be eligible for a federal tax credit.

The first federal incentives for EVs were introduced in 2008, before EVs were common. EVs, while still not as mainstream as gas and diesel-powered vehicles, have come a long way in terms of technology and variety, as well as popularity. Up to now, Federal tax credits have incentivized purchase of these zero-emissions vehicles.

Individuals and their businesses who purchase a new EV before the end of September can still take advantage of the tax credit, up to $7,500. Information summarized here can be fexplored in more detail on the Federal Department of Energy's website: https://fueleconomy.gov/feg/tax2023.shtml

Eligibility for the credit depends on several factors, including your modified adjusted gross income (AGI), the vehicle’s delivery date, the vehicle's manufacturer’s suggested retail price (MSRP), and its critical minerals and/or battery component sourcing.

Income: To qualify for the credit, your modified AGI* may not exceed:

• $300,000 for married couples filing jointly or a surviving spouse
• $225,000 for heads of households
• $150,000 for all other filers

*You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in one of the two years, you can claim the credit.

MSRP: To qualify for the credit, the vehicle's MSRP* cannot exceed:

• $80,000 for vans, sport utility vehicles and pickup trucks
• $55,000 for other vehicles

*MSRP is not necessarily the price you pay. It is the retail price of the vehicle suggested by the manufacturer, including manufacturer installed options, accessories, and trim but excluding destination fees.

Critical Mineral and Battery Component Requirements: To qualify for the credit, vehicles must meet critical mineral and battery component requirements.  Buyers are eligible for:

• $3,750 if the vehicle meets the critical minerals requirement only
• $3,750 if the vehicle meets the battery components requirement only
• $7,500 if the vehicle meets both

A vehicle that does not meet either requirement will not be eligible for a credit. 

Additional Requirements: To qualify for the credit, vehicles must also:

• Have a battery capacity of at least 7 kilowatt  hours
• Have a gross vehicle weight rating of less than 14,000 pounds
• Undergo final assembly in North America
• Be made by a qualified manufacturer  

You can find your vehicle's battery capacity, weight, and final assembly location (listed as "final assembly point") on the vehicle's window sticker. To see if a vehicle is eligible, go to Federal Tax Credits for New Plug-in Electric and Fuel Cell Electric Vehicles Purchased from January 1, 2023, through September 30, 2025.

The sale only qualifies for a credit if:

• You buy the vehicle new
• The dealer reports required information to you at the time of sale and to the IRS*

*Starting January 1, 2024, credits must be initiated at the time of sale. Dealers must register online and give you information about your vehicle's qualifications at the time of sale. Dealers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit. If they do not, your vehicle will not be eligible for the credit. Buyers are advised to obtain a copy of the IRS’s confirmation that a “time-of-sale” report was submitted successfully by the dealer. For more information, see Publication 5905.

How To Apply:

• Get a time-of-sale report from the dealer. The dealer should give you a paper copy of a time-of-sale report when you complete your purchase. Keep this copy for your records because it affirms that the dealer sent a report to the IRS on the purchase date. If you did not receive a copy of the report, follow the IRS’s step-by-step guide.
• File Form 8936, Clean Vehicle Credits with your tax return. You will need to provide your vehicle's VIN.

For more information on how the credit works, visit the IRS’s website. For help, follow the IRS’s step-by-step guide.

Other Scenarios

Used Vehicles: Individuals who purchase a used EV before the end of September may receive a credit of up to $4,000. The income limits and vehicle eligibility are different for used EVs. As with the credit for new EVs, the Used Clean Vehicle Credit is nonrefundable, so you cannot receive a credit greater than what you owe in taxes. For more information on the Used Clean Vehicle Credit and how to apply, visit the IRS’s website. For qualifying makes and models, go to Federal Tax Credits for Pre-owned Plug-in Electric and Fuel Cell Vehicles.

Businesses:  Businesses and tax-exempt organizations who purchase new EVs are eligible for the credit. Businesses and tax-exempt organizations are eligible for up to:

• $7,500 per new EV with a gross vehicle weight rating (GVWR) of less than 14,000 pounds
• $40,000 per new EV with a GVWR of 14,000 pounds or more

Businesses and tax-exempt organizations are not eligible for the Used Clean Vehicle Credit. As with credits for individuals, the Commercial Clean Vehicle Credit is nonrefundable, so businesses cannot receive a credit greater than what they owe in taxes. For more information on the Commercial Clean Vehicle Credit and how to apply, visit the IRS’s website.