Subaru Solterra Federal Tax Credits

Guidance on the Subaru Solterra and Federal Tax Credits
The following is a "high-level" review of the Federal Tax Credits available for the all-new Subaru Solterra Electric Vehicle. This is provided for our Subaru Retailer partners to help relay important information for customer inquiries when it comes to Federal Tax Credits. Federal Tax Credit for Subaru Electric Cars

The Federal Government has instituted a federal tax credit (the "Qualified Plug-in Electric Drive Motor Vehicles" credit) of up to $7,500 for "new" passenger and light truck vehicle purchases sold after 12/31/2019. The credit applies to road-going vehicles that are charged from an external source and have battery packs, including electric vehicles (EV), battery-electric vehicles (BEV) as well as plug-in hybrids (PHEVs). The credit also applies hydrogen fuel-cell cars.

The potential value of the tax credit is based on vehicle battery capacity, vehicle weight and other considerations. For Subaru's current vehicle line-up, the available federal tax credit is $4,502 for the Crosstrek Hybrid PHEV and $7,500 for our Solterra EV. Acquiring vehicle owners can apply the available credit as a "dollar for dollar" tax credit against the federal income tax liability when they file their income tax return for the year in which it was purchased. The value of the credit is limited to the amount of tax they owe for the tax year. Any excess remaining credit cannot be carried forward into the next tax year.

New Vehicle Purchase Contracts
• On new vehicle purchases, the customer is the owner of the vehicle and will be responsible for filing for the federal tax credit when they file their tax return for the year in which it was purchased. (Note: Several states, local municipalities, and utilities also offer electric vehicle and/or solar incentives to EV customers in the form of either rebates or tax credits. The customer should consult their state and local website's and/or consult with their tax advisor for the availability and handling of these credits)

New Vehicle Lease Contracts
• For new Subaru Motors Finance leases, the "owner" of the leased vehicle under the contract is Subaru Motors Finance (SMF) and SMF is entitled to the federal tax credit. Certain Auto Manufacturers and/or related Finance Captive's choose not to pass the tax credit benefit through to their lease customers. However, SMF is passing on the entire federal tax credit benefit through to the Subaru lease customers as a Noncash Credit/Capital Cost Reduction. (See Instructions on processing the noncash credit in Chapter 7 of the SMF Tool kit.).

Manufacturer Tax Credit Phase Out
The Federal Tax credit amount is designed to phase out once a manufacturer achieves 200,000 qualifying electrified vehicle sales in the United States. The 2020MY Crosstrek Hybrid was Subaru's first qualified offering under the program. As a result, as of December 31, 2021, Subaru has over 194,000 of future eligible customer EV vehicle sales before the federal tax credit phase out program could impact available credit amounts.

Questions? Let us know.