Electric Vehicle Income Tax Credit
Colorado residents can claim a tax credit on their state income tax return for purchasing or leasing an electric vehicle, plug-in hybrid, or electric truck through 2028–2032 depending on vehicle type. Credits range from $500–$5,000 depending on the year and vehicle class; vehicles under $35,000 qualify for an additional $2,500 starting in 2024. Light-duty EVs/PHEVs over $80,000 MSRP are ineligible. You apply the credit directly on your Colorado tax return.
This tax credit program expands customer purchasing power across light-duty EVs, PHEVs, medium-duty and heavy-duty trucks, and e-bikes, making your offerings more affordable. For e-bike retailers, your qualified customers receive up to $400 discounts on purchases; you submit retailer claims for $500 per eligible bike sold. Credits are capped at the purchase price or discount amount, whichever is lower, and only Colorado residents who have not already received a discounted e-bike in the same tax year qualify.
Colorado's income tax credit program runs through 2028 for light-duty vehicles and 2032 for trucks and e-bikes, with tiered credit amounts declining over time: light-duty EVs/PHEVs under 8,500 lbs receive $1,500 (2026), $1,000 (2027), $500 (2028); medium-duty trucks get $3,000 annually (2026–2032); heavy-duty trucks receive $5,000 annually (2026–2032). Additional $2,500 credits apply to vehicles under $35,000 MSRP starting 2024. Credits are halved if projected state spending does not exceed 5% of the fiscal year limit. E-bike credits flow through qualified retailers rather than direct purchaser claims. The program targets residential, commercial, local government, and retail supplier sectors.
Program details
- Program ID
- 22156
- Expires
- 1/1/2033
- Last updated
- 3/21/2026
Eligibility
- Sectors
- commercial local government residential retail supplier
- Technologies
- passenger electric vehicles plug-in electric hybrid vehicles medium-duty electric vehicles heavy-duty electric vehicles
Program summary
The State of Colorado offers an income tax credit for the purchase or lease of an electric motor vehicle, a plug-in hybrid motor vehicle, or an original equipment manufacturer electric/plug-in hybrid electric truck. H.B. 1272 of 2023 extended the light-duty credit through the end of 2028, extended the truck credit through the end of 2032, changed the credit values throughout the years, and created a new electric bicycle credit available from 2024 through 2032.
EVs/PHEVs under 8,500 pounds
The innovative motor vehicles income tax credit for the purchase or lease of an EV or PHEV under 8,500 pounds is available through the end of 2028. Category 1 vehicles that exceed MSRP of $80,000 are not eligible for the credit. The credit is $1,500 for purchases or leases in 2026; $1,000 for purchases or leases in 2027; and $500 for purchases or leases in 2028. Starting in 2024, vehicles under $35,000 will be eligible for an additional $2,500. The credit would be halved if the state is not projected to exceed its fiscal year spending limit by 5%.
EVs over 8,500 pounds and Electric Trucks
The innovative trucks tax credit is available through the end of 2032. For light-duty passenger motor vehicles over 8,500 pounds and light-duty trucks, new credits are $1,500 for 2026, $1,000 for 2027, and $500 for 2028. For medium-duty trucks, new credits are $3,000 for 2026 through 2032. For heavy-duty trucks, new credits are $5,000 for 2026 through 2032. The credit would be halved if the state is not projected to exceed its fiscal year spending limit by 5%.
Electric Bicycles
The e-bike tax credit is available to qualified retailers who sell eligible bikes. The retailer will receive $500 for bikes sold at the purchase price or with a $400 discount, whichever is lower; the credit would be available in 2024 through the end of 2032. Purchasers can only receive the $400 discount if they are marked as a qualified purchaser, I.E. they are a Colorado resident and have not already bought a discounted bike in the same tax year. The credit would be halved if the state is not projected to exceed its fiscal year spending limit by 5%.
Contact & resources
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
