C-Max Energi Tax Credit

C-Max Energi Charge Port with Nissan Leaf Charger

Ford C-Max Energi Charge Port with Nissan Leaf J1772 Charger

The C-Max Energi is now appearing on the IRS web site.  It qualifies for a tax credit of $4007.  [The IRS has now stated that the tax credit is $4,007.  It was previously listed at $3751 and stated by Ford as $3750.]  The publication describing the tax credit is here.  The IRS document describing how the tax credit is calculated is here.  The C-Max has a 7.6 kWh battery.  This is the IRS statement for the calculation, “For vehicles acquired after 12/31/2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours.”  [The language is ambiguous and the IRS has now stated the credit is $4007.  The $3751 credit assumed that the 7.6 kWh battery uses 7 kWh for the calculation.  The fractional kWh is now used in the calculation.  That results in a tax credit of $4007.  IRS form 8936 is used to claim the credit.  Details of the credit are in an IRS notice.  The credit is not phased out until Ford has sold 200,000 vehicles that qualify for the credit.  At the present time, the C-Max Energi, Focus Electric, and Fusion Energi are the only Ford cars that qualify for the credit.  It will take quite awhile before Ford sells 200,000 of these three models.

The $4,007 tax credit for the Energi is not lost when the Alternative Minimum Tax (AMT) is applicable.  Here’s an IRS Q&A on the topic:

Q. Does the Alternative Minimum Tax (AMT) impact the alternative motor vehicle credit?

A. Starting in 2009, the new law allows the alternative motor vehicle credit, including the tax credit for purchasing hybrid vehicles, to be applied against the alternative minimum tax. Prior to the new law, the alternative motor vehicle credit could not be used to offset the AMT.

The Department of Energy web site to find state laws and incentives for hybrid and electric vehicles is located here.

Ford C-Max Hybrid (not Energi) owners do not qualify for a Federal Tax credit.

This blog was first published 22 Nov 2012.  It was updated 13 Dec 2012, 26 Dec 2012,  April 12, 2013, and September 27, 2013.

 

 

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13 thoughts on “C-Max Energi Tax Credit

  1. Helpful information! I’m actually considering leasing an Energi and I thought I had it figured out that I would receive the tax credit if I leased for 36 months. After seeing your site I’m second guessing. It sounds like Ford may get that credit as the lessor instead of me. Any clarity you can add or possibly direct me to? Thanks!!

    • Tax credits, e.g, the U.S. government $4007, are received by Ford Credit or the company holding the lease, not you. It will or at least should reduce your payments, residual value, etc. Some government incentives are not tax credits. If you live in California, the state payment is from the state to you even if you lease the car. I hope this is clear now.

      • Thanks! In parallel I came to the same conclusion. Ford offers a $4000 incentive to compensate. Unfortunately I have to pay tax on that “incentive” so the net is a bit less than what I would have received from the government had I purchased the vehicle outright.

  2. I am puzzled by the Form 8936. I am buying a C-Max Energi in late 2013. I won’t use the car for business purposes. Line 17 on the Form 8936 seems to cap the credit at $2500. What am I missing?

    • Never mind — I figured it out, and it works. Line 15 (which I glossed over) says to SKIP lines 16 and 17 if you have a 4-wheel car.

    • With a lease, the tax credit goes to Ford Credit (or the lessor). If you buy the car, whether paying cash or on credit (e.g., with Ford Credit), the tax credit goes to the buyer (you). In either case, the owner of the vehicle gets the credit (you don’t own the vehicle with a lease).

  3. What Craig said makes sense, but I called Ford and Ford credit. They said that both federal and state tax credits come to me when I lease.

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