Kentucky EV Tax Credits: What Incentives Are Available in 2025?
As electric vehicles become more popular across the U.S., many drivers in the Bluegrass State are asking: What Kentucky EV tax credits are available in 2025? While Kentucky currently does not offer a state-level EV tax credit, there are several other ways for residents to save on EV purchases and ownership costs.
In this guide, we’ll break down everything you need to know about Kentucky EV tax credits, including federal tax incentives, utility rebates, EV registration fees, and charging station perks.
📊 Summary Table
| Incentive Type | Kentucky Resident | Applicable To | Value/Rate |
|---|---|---|---|
| State EV Tax Credit/Rebate | ❌ None | Purchase or lease of EVs | $0 |
| Federal New EV Tax Credit | ✅ Yes | New EVs/PHEVs | Up to $7,500 |
| Federal Used EV Tax Credit | ✅ Yes | Used EVs (dealership sale) | Up to $4,000 |
| EV Registration Fee (Annually) | ✅ Yes | EVs/PHEVs ($126), e‑motorcycles ($63) | |
| EV Charging Excise Tax | ✅ Yes | Fast charging >20 kW | ~3.2 ¢/kWh |
| Home Charger Federal Credit | ✅ Yes | Level 2 charger installation | Up to $1,000 |
| Utility Charger/TOU Incentives | ✅ Yes | Residential EV owners | Starting $25 sign‑on + $5/mo |
| School Bus & Institutional Grants | ✅ Yes | School districts, agencies | 50% cost match for electric buses or chargers |
No Statewide Kentucky EV Tax Credits… Yet
As of 2025, Kentucky does not have a state-sponsored EV tax credit or rebate program. This means there is no cash rebate or state income tax deduction for purchasing or leasing a new or used electric vehicle.
However, that doesn’t mean Kentucky drivers are out of luck. Other financial incentives—especially at the federal and utility levels—can help offset the cost of going electric.
Federal Tax Credits for Kentucky EV Buyers
❌The Federal EV Tax Credit expires September 30, 2025
Although Kentucky EV tax credits don’t currently exist at the state level, residents are still eligible for the generous federal EV tax credits under the Inflation Reduction Act:
✅ New EVs:
- Up to $7,500 in tax credits
- Income limit: $150,000 for single filers, $300,000 for joint filers
- MSRP limit: $55,000 for cars, $80,000 for SUVs/trucks
- Must meet North American final assembly and battery sourcing requirements
✅ Used EVs:
- Up to $4,000 or 30% of vehicle price (whichever is less)
- Vehicle must be at least 2 years old
- Price cap: $25,000
- Income cap: $75,000 for single, $150,000 for joint filers
- Buyer must not have claimed a used EV credit in the past 3 years
💡 Tip: Use the IRS’s list of qualifying vehicles to confirm eligibility before you buy.
Kentucky EV Registration Fees
In 2025, Kentucky implemented higher annual registration fees for EV owners to help offset lost gas tax revenue:
- $126/year for electric vehicles
- $63/year for hybrid vehicles
- 3.2¢ per kWh excise tax for public fast charging above 20kW
While these fees add to the cost of ownership, they are still much lower than fuel and maintenance costs of traditional gas-powered vehicles over time.
Utility Rebates & Charging Incentives
Many Kentucky utilities offer rebates and managed charging programs to help reduce your EV charging costs:
⚡ Kentucky Utilities / LG&E:
- $25 sign-up bonus for managed charging
- $5 monthly credit for enrolling your EV charger in their program
- Must use a qualified Level 2 charger
⚡ Local Electric Co-Ops (e.g., Blue Grass Energy, Clark Energy):
- Time-of-Use (TOU) electricity rates — as low as $0.04–$0.06/kWh during off-peak hours
- Helps lower your charging bill when charging overnight
✅ Action Step: Check with your local utility company to see if they offer EV programs or rate discounts in your area.
Federal Credit for Home EV Chargers
If you install a Level 2 home charging station, you may qualify for a federal tax credit of up to $1,000 under the Alternative Fuel Refueling Property Credit. Businesses may qualify for up to $100,000 for public chargers.
This incentive makes it easier to charge at home without relying solely on public infrastructure.
Business, School, and Infrastructure Grants
The state does offer grants and cost-sharing programs for entities that want to go electric:
- 50% reimbursement for school districts buying electric school buses
- 50% cost-share for DC fast chargers or Level 2 public chargers (via Volkswagen settlement funds)
🚍 Pro Tip for Schools & Municipalities: Apply through the Kentucky Energy & Environment Cabinet or local Clean Cities programs.
Is Going Electric in Kentucky Worth It?
Even without state-specific Kentucky EV tax credits, switching to an EV still offers strong savings potential thanks to:
- Federal incentives up to $7,500
- Reduced maintenance and fuel costs
- Utility rebates for charging
- Lower electricity costs compared to gas
The savings can add up quickly—especially for daily commuters or rural drivers who put a lot of miles on their vehicle.
Final Thoughts: Kentucky EV Tax Credits in 2025
While Kentucky EV tax credits may not be available at the state level yet, federal tax credits, utility rebates, and home charger incentives can still make EV ownership highly affordable in the Bluegrass State.
As Kentucky’s EV infrastructure grows, more local programs may be introduced in the future. Be sure to check back often for the latest updates and tips on maximizing your savings as an EV owner.
Related Posts on EVInsiderGuide.com:
- [Best EVs That Qualify for the $7,500 Federal Credit]
- [How to Install a Level 2 Charger at Home in Kentucky]
- [Top Electric Vehicles for Rural and Highway Driving]
