⚡ Colorado EV Tax Credits 2025: Everything You Need to Know
As electric vehicle (EV) adoption grows across the United States, Colorado continues to lead with some of the most generous state incentives. In 2025, Colorado EV tax credits can help residents save thousands—stackable with federal rebates and utility discounts. Whether you’re considering a new EV or trading in your gas-powered car, this comprehensive guide breaks down how to maximize your savings.
💰 What Are Colorado EV Tax Credits?
Colorado EV tax credits are refundable state income tax credits provided to residents who purchase or lease qualifying electric vehicles. The amount you receive depends on:
- Vehicle type (new or used)
- MSRP price
- Income level
- Trade-in eligibility
These credits are stackable with federal EV tax incentives, making Colorado one of the best states to go electric.
🚗 Colorado State Tax Credit Details (2025)
| Vehicle Type | MSRP Threshold | Credit Amount |
|---|---|---|
| New EV | $35,000 or less | $6,000 |
| New EV | Over $35,000 | $3,500 |
| Leased EV | Any amount | $3,500 |
- Refundable Credit: You receive the full amount even if you owe little to no income tax.
- Available at Point of Sale: Buyers can assign the credit to the dealership and get instant savings.
- Claim via Form DR-0617 or assign via Form DR-0618.
📝 Pro Tip: Choose a qualifying EV under $35,000 to unlock the full $6,000 state credit!
🔁 Vehicle Exchange Colorado (VXC) Rebate
Income-qualified residents can get an additional $4,000–$6,000 through the Vehicle Exchange Colorado (VXC) program by trading in an older gas-powered vehicle.
| Vehicle Type | VXC Rebate Amount |
|---|---|
| New EV | Up to $6,000 |
| Used EV | Up to $4,000 |
- Must retire an eligible gas-powered vehicle
- Applies at point of sale
- Does not affect your state or federal credits
👉 Pair this rebate with your Colorado EV tax credits for savings of up to $12,000 before federal incentives.
🏆 Federal EV Tax Credit (Clean Vehicle Credit)
Eligible new EVs may qualify for a federal credit of up to $7,500, while used EVs can receive up to $4,000 under the Inflation Reduction Act. (UPDATE: The Federal EV Tax Credit expires September 30, 2025)
- Income Limits Apply (max $150K for individuals, $300K for joint)
- Price Caps: $55,000 for cars, $80,000 for trucks/SUVs
- Final Assembly in North America required
When combined with Colorado EV tax credits, you could save up to $19,500 on a new EV!
🔌 Utility & Charging Rebates in Colorado
Some utility companies offer rebates for home charger installation:
- Xcel Energy: Up to $1,300 rebate for income-qualified households
- Holy Cross Energy: $500–$1,200 for Level 2 EV charger installation
- Colorado Springs Utilities: Varies by program availability
💡 Tip: Install a Level 2 charger at home to qualify for time-of-use electricity rates and faster charging.
🧾 Step-by-Step: How to Claim Colorado EV Tax Credits
- Buy or lease a qualifying EV.
- Assign the credit to the dealer or claim it when filing taxes.
- If eligible, apply for the VXC rebate.
- Submit tax forms: DR-0617 (individual) or DR-0618 (if assigning).
- Combine with federal credit using IRS Form 8936.
✅ Eligibility Requirements
To qualify for Colorado EV tax credits:
- The vehicle must be new and registered in Colorado.
- The buyer must be a Colorado resident.
- The vehicle must be battery electric (BEV) or plug-in hybrid (PHEV).
- Income-qualified programs require proof of income and trade-in vehicle documentation.
💡 EVInsiderGuide.com Quick Recap
| Incentive Type | Maximum Benefit |
|---|---|
| Colorado EV Credit | $6,000 |
| VXC Rebate | $6,000 |
| Federal Tax Credit | $7,500 |
| Utility Rebates | $1,300+ |
| Total Potential | $20,800+ |
📌 Final Thoughts
With multiple layers of savings, Colorado EV tax credits make 2025 the perfect time to go electric. When combined with federal incentives and utility rebates, you could drive off in a new EV with $15,000 to $20,000+ in total savings.
Don’t wait—credits may decrease as EV adoption rises and federal incentives evolve. Explore your options, verify eligibility, and plug into the future today.
