Indiana EV Tax Credit: Federal Options, Surcharge, and Rebates

Indiana does not offer a state EV tax credit. No provision in Indiana’s tax code gives you money back for buying an electric vehicle, and the federal credits that used to help have been terminated for vehicles acquired after September 30, 2025.¹ If your business placed a qualifying commercial EV in service before that date, you can still claim the federal credit on the 2025 return you file in 2026. A separate federal credit for installing charging equipment remains available through mid-2026. Indiana itself charges EV owners an extra annual registration fee rather than offering an incentive.

No State Purchase Credit Exists in Indiana

Indiana’s Schedule IN-OCC is the form businesses use to claim certified state tax credits. It lists credits for natural gas commercial vehicles, historic rehabilitation, venture capital investment, school scholarships, and several other programs. Nothing on it applies to electric or fuel cell vehicles.² The U.S. Department of Energy’s database of Indiana laws and incentives likewise shows no state-level EV purchase credit.³

Some online guides describe what is actually the federal Section 45W commercial clean vehicle credit as though it were an Indiana program. The parameters give it away: 30% of the purchase price for fully electric vehicles, 15% for plug-in hybrids, a $7,500 cap under 14,000 pounds and $40,000 above that weight. Those figures come from the federal credit, not from Indiana. And that federal credit is no longer available for new acquisitions.

The Federal Credits That Ended September 30, 2025

The One Big Beautiful Bill Act, signed into law on July 4, 2025, terminated three federal clean vehicle credits for vehicles acquired after September 30, 2025:⁴

The New Clean Vehicle Credit under Section 30D, worth up to $7,500 for individuals buying a new qualifying EV or plug-in hybrid.
The Previously Owned Clean Vehicle Credit under Section 25E, worth up to $4,000 for individuals buying a qualifying used EV.
The Commercial Clean Vehicle Credit under Section 45W, worth up to $7,500 for lighter commercial EVs and up to $40,000 for heavier ones.

If you are shopping for an EV in 2026, no federal or Indiana purchase credit is available to you.¹

Claiming the Commercial Credit on Your 2025 Return

If your Indiana business bought and placed a qualifying commercial EV in service between January 1 and September 30, 2025, the Section 45W credit is still yours to claim on your 2025 federal return.

How the Credit Was Calculated

Section 45W equaled 30% of your basis in a fully electric or fuel cell vehicle, or 15% for a plug-in hybrid.⁵ The credit could not exceed the vehicle’s incremental cost over a comparable gas or diesel vehicle. Three figures determined your actual credit: the percentage of basis, the incremental cost, and the statutory cap. You got the smallest of the three.⁶

The caps were $7,500 for vehicles with a gross vehicle weight rating under 14,000 pounds and $40,000 for heavier vehicles. Battery capacity mattered: at least 7 kilowatt-hours under 14,000 pounds, at least 15 kilowatt-hours at 14,000 pounds or more.⁵

For incremental cost, the IRS allowed several methods. You could rely on the safe harbors in IRS Notice 2023-9 and Notice 2024-5, use a manufacturer’s written cost determination, or calculate the powertrain cost difference yourself.⁷

Who Qualified

The vehicle had to be used in your trade or business, not driven personally by the owner or employees. For tax purposes, that meant it needed to be depreciable property used in a business context.⁸ Tax-exempt organizations could qualify without the depreciation requirement as long as the vehicle was not leased to others.

Leases are trickier. If the arrangement is a true lease for federal tax purposes, the leasing company claims the credit, not the business operating the vehicle. If the IRS recharacterizes the lease as a sale, the lessee may be eligible instead, and the lessor loses eligibility because they are treated as having resold the vehicle.⁸

The Indiana Basis Ripple

Section 45W reduces your federal income tax and has no line on Schedule IN-OCC or any other Indiana form. There is one indirect effect on your Indiana return, though. Because the credit required depreciable property, it reduced the vehicle’s depreciable basis for federal purposes, and that reduced basis flows through to your Indiana adjusted gross income calculations. If you claimed the credit, make sure your Indiana depreciation schedules reflect the adjusted basis, and consider running this past a tax professional.

Charging Equipment Credit Through June 30, 2026

One federal incentive is still available into 2026: the alternative fuel vehicle refueling property credit under Section 30C, which covers installing EV charging equipment. It applies to property placed in service on or before June 30, 2026.⁹

For businesses, the base credit is 6% of the cost of qualifying charging equipment, up to $100,000 per item. Businesses meeting the prevailing wage and apprenticeship requirements can claim the full 30% rate. Individual homeowners can claim 30% of installation costs, capped at $1,000.⁹

Location is the catch. The charging equipment must sit in a census tract that qualifies as either a low-income community or a non-urban area. Low-income tracts follow the definition used for the New Markets Tax Credit; non-urban tracts are defined by Treasury guidance. Meeting either one is enough.¹⁰ Many suburban commercial areas in Indiana meet neither test, so verify your address qualifies before committing to a project.

Indiana’s Annual EV Surcharge

Rather than an incentive, Indiana charges EV owners an extra annual registration fee to replace lost gas tax revenue. Battery electric vehicle owners pay an additional $221 per year. Plug-in hybrid and conventional hybrid owners pay $74. Motor-driven cycles are exempt.³

The fee is indexed to Indiana’s special fuel tax and adjusts each year, so these amounts will move. It is collected at registration renewal through the Indiana Bureau of Motor Vehicles and applies to every registered EV regardless of miles driven.

Utility Rebates for Indiana Businesses

Several Indiana electric utilities offer rebates for commercial charging station installations, and those rebates can stack with the federal Section 30C credit where both apply. Duke Energy Indiana has offered rebates for Level 2 and DC fast chargers to commercial customers, and Indiana Michigan Power has run programs for small businesses and commercial properties. Amounts and eligibility rules change often, so check with your utility before buying equipment. These are utility programs, not state programs, and availability depends on your service territory and the current program budget.

Records to Keep If You Claimed the Credit

If your business claimed Section 45W on a vehicle placed in service in 2025, keep the documentation. That means the sales invoice showing the date and purchase price, the vehicle identification number, documentation of the battery capacity and gross vehicle weight rating from the manufacturer’s specifications or the doorjamb label, and any incremental cost calculations you relied on.

The Indiana Department of Revenue can issue a proposed assessment up to three years after a return is filed or its due date, whichever is later.¹¹ The IRS has a similar three-year window. Because Section 45W involved both federal eligibility criteria and a depreciation basis adjustment that flows into Indiana calculations, plan to hold your supporting documents for at least three years after filing. If a return understated income by more than 25%, both the IRS and Indiana can extend that window to six years, so longer is safer.

1
Internal Revenue Service. Clean Vehicle Tax Credits
2
IN.gov. Schedule IN-OCC – State Forms Online Catalog
3
Alternative Fuels Data Center. Indiana Laws and Incentives
4
Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21
5
Office of the Law Revision Counsel. 26 USC 45W – Credit for Qualified Commercial Clean Vehicles
6
Internal Revenue Service. Commercial Clean Vehicle Credit
7
U.S. Department of the Treasury. U.S. Department of the Treasury Releases Proposed Rules for Qualified Commercial Clean Vehicles
8
Internal Revenue Service. Topic G – Frequently Asked Questions About Qualified Commercial Clean Vehicle Credit
9
Office of the Law Revision Counsel. 26 USC 30C – Alternative Fuel Vehicle Refueling Property Credit
10
Internal Revenue Service. Frequently Asked Questions Regarding Eligible Census Tracts for Purposes of the Alternative Fuel Vehicle Refueling Property Credit Under Section 30C
11
Indiana General Assembly. Indiana Code 6-8.1-5-2 – Time Limits on Issuing Proposed Assessment