W.Va. alternative-fuel tax credits available

CHARLESTON – West Virginia taxpayers who own alternative-fuel vehicles may be eligible for state and federal tax credits, a national tax preparer said.

A maximum refundable credit of $7,500 is available against West Virginia income tax for passenger vehicles and a maximum of $25,000 for commercial vehicles, covering 50 percent of the cost of converting a vehicle to operate on an alternative fuel or 35 percent of the vehicle purchase price, H&R Block said.

The credit is available to taxpayers who purchase an alternative fuel vehicle or convert a vehicle to operate on an alternative fuel. By definition, alternative-fuel motor vehicles operate solely on alternative fuel, are capable of operating on one or more alternative fuels in combination or are capable of operating on an alternative fuel and also capable of operating on gasoline or diesel fuel.

Alternative fuel includes natural gas, propane, ethanol, hydrogen, coal derived liquid fuel, and electricity. Also included are fuel mixtures containing 85 percent or more of methanol, ethanol or other alcohols.

Many common vehicles such as flex-fuel and hybrid vehicles may qualify for the credit, the company said.

Also available is a credit available against federal income tax of up to $7,500 for qualified plug-in electric drive motor vehicles. It is currently only for electric vehicles that are capable of “plugging in” to recharge with electricity, like the Chevrolet Volt, the plug-in Toyota Prius and the Nissan Leaf.

The West Virginia credit is effective for tax year 2011 and later. The federal credit is effective for tax year 2010 and later. Consequently, West Virginia taxpayers may wish to amend their 2011 returns to take advantage of the West Virginia credit, or earlier for the federal credit, if they purchased a qualifying vehicle and were not aware of the credit at the time.