- March 6, 2023
- Posted by: Gavtax gavtax
- Categories: Small Business Tax, SMALL BUSINESS TAXES
You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). (Source IRS)
The credit is available to both individuals and their businesses.
To qualify, you must:
- Buy it for your own use, not for resale.
- Use it primarily in the U.S.
In addition, your modified adjusted gross income (AGI) may not exceed:
- $300,000 for married couples filing jointly.
- $225,000 for heads of households.
- $150,000 for all other filers.
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
The credit is non-refundable, so you can’t get back more on the credit than you owe in taxes. You cannot apply any excess credit to future tax years.
To qualify, a vehicle must:
- Have a battery capacity of at least 7 kilowatt hours.
- Have a gross vehicle weight rating of less than 14,000 pounds.
- Be made by a qualified manufacturer. See our index of qualified manufacturers and vehicles.
- FCVs do not need to be made by a qualified manufacturer to be eligible. See Rev. Proc. 2022-42 for more detailed guidance.
- Undergo final assembly in North America.
The sale qualifies only if:
- You buy the vehicle new.
- The seller reports required information to you at the time of sale and to the IRS.
- Sellers are required to report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.
In addition, the vehicle’s manufacturer suggested retail price (MSRP) can’t exceed:
- $80,000 for vans, sport utility vehicles and pickup trucks
- $55,000 for other vehicles
MSRP is the retail price of the automobile suggested by the manufacturer, including options, accessories and trim but excluding destination fees. It isn’t necessarily the price you pay.
To confirm whether a vehicle is a van, sport utility vehicle, pickup truck or other, see our qualified vehicles and manufacturers.
You can find your vehicle’s weight, battery capacity, final assembly location (listed as “final assembly point”) and VIN on the vehicle’s window sticker.
To check online if a specific vehicle meets the requirements for final assembly location, go to the Department of Energy’s page on Electric Vehicles with Final Assembly in North America and use the VIN Decoder tool under “Specific Assembly Location Based on VIN.”
How to Claim the Credit
To claim the credit, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) with your tax return. You will need to provide your vehicle’s VIN.
Source: IRS, 2022