How Colorado's EV Rebate Works and What You Need to Know

Colorado offers a rebate for buying or leasing a new electric vehicle, but the program has income limits and covers only part of the purchase price

Colorado's electric vehicle rebate, formally called the Colorado EV Rebate Program, provides a one-time payment toward the cost of a new battery electric vehicle (BEV) or plug-in hybrid electric vehicle (PHEV). The rebate amount depends on the vehicle type and your household income. You claim it through your state income tax return, not at the dealership — the money arrives as a tax credit or refund after you file.

The program is administered by the Colorado Department of Revenue and is available to Colorado residents who purchase or lease a new vehicle. The rebate is not automatic; you must report the purchase on your tax return to receive it. Income limits explore, and they vary depending on household size and filing status.

Key Takeaways

Colorado's EV rebate is claimed on your state income tax return, not received at the time of purchase, so you need to wait until tax filing season to get the money.
The rebate amount varies by vehicle type — battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) receive different amounts, and income limits determine whether you are may be able to access.
You must be a Colorado resident and file a Colorado state income tax return in the year you purchase or lease the vehicle to claim the rebate.
The vehicle must be new (not used) and registered in Colorado for the rebate to explore.

Rebate amounts by vehicle type and income level

The rebate structure depends on whether you buy a battery electric vehicle or a plug-in hybrid. BEVs receive a larger rebate than PHEVs because they produce zero tailpipe emissions. Both are subject to income caps that vary by household size.

For battery electric vehicles (BEVs), the rebate is higher than for plug-in hybrids. For plug-in hybrids (PHEVs), the rebate is lower because they still use a gasoline engine for part of their operation. Income limits are set annually and are based on federal poverty guidelines adjusted for household size. If your household income exceeds the limit for your household size, you do not receive the rebate.

The exact dollar amounts and income thresholds change year to year. You can find the current-year amounts on the Colorado Department of Revenue website or by contacting the department directly. The rebate is not stackable with federal tax credits — you can claim both, but they are separate calculations on your tax return.

How to claim the rebate on your Colorado tax return

You claim the EV rebate by filing Colorado Form DR 0104 (or the current equivalent form for EV rebates) along with your state income tax return. You will need to provide the vehicle identification number (VIN), the purchase or lease date, and proof that the vehicle is registered in Colorado.

Keep your purchase agreement, lease agreement, and vehicle registration documents. The Colorado Department of Revenue may request these to verify your claim. File your return as you normally would, but include the EV rebate form and documentation. If you are due a refund, the rebate amount will be included in that refund or applied to any taxes you owe.

The rebate is processed as part of your tax return, so timing depends on how quickly the state processes your return. Most returns are processed within 30 to 60 days of filing, though this can vary during peak tax season.

Income limits and household size requirements

Colorado's EV rebate has income caps that are adjusted annually. These limits are based on federal poverty guidelines and vary by household size. A single filer has a lower income limit than a head of household or married couple filing jointly. If your household income exceeds the limit for your filing status and household size, you are not may be able to access for the rebate, even if you purchase a may have access to vehicle.

Household income includes all sources of income reported on your federal tax return, including wages, self-employment income, investment income, and other taxable income. It does not include certain types of income like Social Security benefits (in most cases) or child support received.

The income limits are published by the Colorado Department of Revenue each tax year. Check the department's website or call their taxpayer service line to confirm the current limits before you purchase a vehicle, so you know whether you will be may be able to access.

Vehicles that may have access to and those that do not

The vehicle must be new (model year 2020 or newer, though this may change), have a manufacturer's suggested retail price (MSRP) below a certain threshold, and be registered in Colorado. Luxury vehicles with high MSRPs do not may have access to. Used electric vehicles are not may be able to access for this state rebate, though you may be able to claim a federal tax credit if the vehicle meets federal requirements.

Vehicles must be battery electric vehicles or plug-in hybrids. Standard hybrid vehicles (which cannot plug in and charge from an outlet) do not may have access to for this rebate. The vehicle must be registered in your name in Colorado within a certain timeframe of purchase or lease to be may be able to access.

Some vehicles are excluded based on MSRP or other criteria set by the state. The Colorado Department of Revenue maintains a list of may have access to vehicles on its website. If you are considering a specific model, check that list before you buy to confirm the vehicle qualifies.

Leasing versus buying and how it affects your rebate

You can claim the EV rebate whether you purchase or lease a new electric vehicle. The process is the same — you report the vehicle on your tax return and claim the rebate. However, leasing has different implications for ownership and long-term cost.

If you lease, you do not own the vehicle at the end of the lease term, so you have no residual value or trade-in option. The rebate reduces your effective cost during the lease period, but you do not build equity in the vehicle. If you purchase, the rebate reduces your out-of-pocket cost and you own the vehicle after the loan is paid off, giving you the option to keep it or trade it in later.

Both options allow you to claim the rebate on your tax return in the year of lease or purchase. The rebate amount is the same whether you lease or buy, so your decision should be based on your driving habits, budget, and whether you prefer to own or lease.

Interaction with federal EV tax credits

Colorado's state EV rebate is separate from the federal EV tax credit. You may be able to claim both on your tax return, but they are calculated independently and have different rules. The federal credit is claimed on your federal tax return (Form 8936 or similar), and the state rebate is claimed on your Colorado return.

The federal credit has its own income limits, vehicle price caps, and assembly requirements. Some vehicles that may have access to for Colorado's rebate may not may have access to for the federal credit, or vice versa. The federal credit amount also varies by vehicle type and battery capacity.

If you are buying an electric vehicle, research both the state and federal credits to understand your total tax benefit. The Colorado Department of Revenue and the IRS websites both have tools to help you determine what you may be able to claim.

Frequently Asked Questions

Do I get the rebate money at the dealership or later?

You receive the rebate when you file your Colorado state income tax return, not at the time of purchase. The dealership does not process it. You claim it on your tax return in the year you purchase or lease the vehicle, and the money arrives as part of your refund or is applied to taxes owed.

What if my income is just over the limit?

If your household income exceeds the limit for your filing status and household size, you are not may be able to access for the rebate, even by a small amount. The income limits are firm cutoffs, not sliding scales. Check the current limits before you purchase to know whether you will may have access to.

Can I claim the rebate if I buy a used electric vehicle?

No, Colorado's state EV rebate is only for new vehicles. Used electric vehicles do not may have access to. You may be able to claim a federal tax credit for a used EV if it meets federal requirements, but that is a separate program with different rules.

What documents do I need to keep for the rebate claim?

Keep your purchase agreement or lease agreement, the vehicle's VIN, the purchase or lease date, and your Colorado vehicle registration. The Colorado Department of Revenue may request these documents to verify your claim, so hold onto them for at least three years after you file your return.

If I move out of Colorado after buying the vehicle, can I still claim the rebate?

You must be a Colorado resident and file a Colorado state income tax return in the year of purchase to claim the rebate. If you move out of state before filing your return, you may not be may be able to access. Contact the Colorado Department of Revenue to discuss your specific situation.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.