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Federal

E-BIKE Act

Source: Congress.gov  ·  3,765 words in original text
What This Bill Does
This bill creates a new tax credit (a reduction in taxes owed) for individuals who buy new electric bicycles. People can claim 30 percent of the cost of a qualified electric bicycle as a credit on their federal income taxes, up to certain limits. ##
Who It Affects
- Individual taxpayers buying new electric bicycles for personal use - Electric bicycle retailers who sell the bikes - Electric bicycle manufacturers who make the bikes - U.S. territories and possessions with tax systems ##
Key Provisions
- You can claim a tax credit equal to 30 percent of the cost of each qualified electric bicycle you buy, but the credit cannot exceed 30 percent of a maximum $5,000 cost per bike (meaning the maximum credit is $1,500 per bike) (Sec. 36C(a) and (b)(1)) - You can only claim this credit for one bike per year, or two bikes per year if you file a joint return with a spouse, minus any qualified bikes you claimed credits for in the previous two years (Sec. 36C(b)(2)) - The credit starts to reduce if your income exceeds $150,000 (or $225,000 for head of household, or $300,000 for joint filers), decreasing by $100 for every $1,000 of income above those thresholds (Sec. 36C(b)(3)) - The bike must have an electric motor of less than 750 watts, must have working pedals and a seat, and must be manufactured with a unique vehicle identification number that you report on your tax return (Sec. 36C(c) and (e)) - The bike must be classified as a Class 1, Class 2, or Class 3 electric bicycle or tricycle, with speed limits ranging from 20 to 28 miles per hour depending on the class (Sec. 36C(c)(2), (3), (4)) - Retailers who sell the bikes can register to receive the credit directly at the point of sale instead of you claiming it on your taxes, as long as they disclose all pricing information to you upfront and pay you the full credit value (Sec. 36C(h)) ##
What Changes
If this bill becomes law, eligible individuals can reduce their federal income taxes by claiming 30 percent of the cost of a new electric bicycle purchase (up to $1,500 per bike per year, subject to income limits). Alternatively, registered bicycle retailers can apply the credit immediately at the time of purchase, giving buyers an instant discount instead of waiting to claim it on their taxes. ##
Important Definitions
- **Class 1 electric bicycle or tricycle:** A two or three wheeled vehicle with an electric motor that provides assistance only when the rider is pedaling and stops providing assistance when the vehicle reaches 20 miles per hour (Sec. 36C(c)(2)) - **Class 2 electric bicycle or tricycle:** A two or three wheeled vehicle with an electric motor that can propel the vehicle without the rider pedaling and stops providing assistance at 20 miles per hour (Sec. 36C(c)(3)) - **Class 3 electric bicycle or tricycle:** A two or three wheeled vehicle with an electric motor that provides assistance only when the rider is pedaling and stops providing assistance at 28 miles per hour (Sec. 36C(c)(4)) - **Qualified electric bicycle:** A new bike or tricycle you buy for personal use (not to resell) that meets specific equipment requirements, costs no more than $8,000, and has been certified for safety standards (Sec. 36C(c)(1)) - **Modified adjusted gross income:** Your regular adjusted gross income increased by any income you excluded from taxes under specific tax code sections (Sec. 36C(b)(3)(C)) ##
Effective Date
The law applies to property you put into service (start using) after the date the bill becomes law, for tax years ending after that date (Sec. 1(d)).
Important: This plain English summary was generated by AI and is provided for informational purposes only. It is not legal advice. Always consult the official bill text on Congress.gov or a qualified attorney for legal matters.