TRANSPORTATION

Clean Vehicle Credit

This incentive extends a pre-existing program until 2032 while adding new restrictions. The previous version only covered electric vehicles, while this expanded coverage also includes hybrid and hydrogen fuel cell cars. For new vehicles, a $7,500 credit applies to sedans with sale prices below $55,000 and trucks and SUVs below $80,000. A credit of 30% of the sale price up to $4,000 can be applied to used cars, but only if they are $25,000 or less. Both options also have income caps for potential buyers. (New cars: $150,000 for single filers, $225,000 for heads of household, and $300,00 for joint filers. Used cars: $75,000 for single filers, $112,500 for heads of household, and $150,000 for joint filers). Clean vehicles must have final assembly in North America, as well as a percentage of battery and critical mineral components also sourced from North America (40% of critical mineral components in 2023, ramping up to 80% by 2029, and 50% of battery components in 2023, ramping up to 100% by 2029). Buyers may still qualify for half the credit if either the battery or critical mineral component requirement is met. The IRS has released an FAQ sheet which includes information on qualifying models of vehicles.

To Claim Credit: Fill out IRS Form 8936

Commercial Clean Vehicle Credit

Introduced through the Inflation Reduction Act, this new program is a counterpart to the consumer version. As of 2023, commercial vehicles can qualify for a tax credit that covers whichever is less: either 15% of base vehicle cost (which increases to 30% if the vehicle is “not powered by a gasoline or diesel internal combustion engine”) or the difference in cost between the clean vehicle purchased as compared to a gaspowered model similar in size and use. The credit has a maximum value of $7,500 for vehicles weighing less than 14,000 pounds, and up to $40,000 for vehicles over 14,000 pounds. This credit program will not be subject to the same requirements of U.S. sourcing of battery and critical mineral components as the non-commercial version. Much like the clean energy investment tax credit, this program will have a directpay option for tax-exempt organizations. The IRS has released an FAQ sheet on the program but has not yet finalized a form to file for claiming the credit. This article contains some additional details.

Alternative Fuel Vehicle Refueling Property Credit *◊

Also referred to as the “Alternative Fuel Infrastructure Tax Credit,” this credit is meant to provide fueling support for clean vehicles. Like many of the other programs on this list, the current version extends through 2032. While this credit applies to chargers for electric vehicles, it can also be used for some other forms of infrastructure for clean-burning fuel. If claiming as a business credit, infrastructure must be installed on “qualified clean-fuel vehicle refueling property.” At least 6% of each charger’s cost may be covered, but this increases to 30% (or $30,000, whichever is lower) if that infrastructure is built within low-income or non-urban census tracts based on 2020 U.S. Census data and also satisfies IRS wage and labor requirements. For those installing clean-fuel infrastructure at home (or on a non-qualifying property), a credit can be claimed for up to 30% of the total costs or $1,000 — whichever is lower. This program will complement other government plans to construct a national charging network by 2030.

To Claim Credit: Fill out IRS Form 8911