IRS GUIDANCE ON CLEAN VEHICLE CREDITS

IRS GUIDANCE ON CLEAN VEHICLE CREDITS

IRS guidance on clean vehicle credits. In IRS Publication IR-2022-231, guidance was given about the clean vehicle credits for new, previously owned and commercial clean vehicles in a Fact Sheet they put out (FS-2022-42), the fact sheet is in PDF format. The inflation Reduction Act of 2022 makes several changes to the new clean vehicle credit for qualified plug in electric vehicles, including adding fuel cell vehicles. The IRS has revised some of those guidelines and issued new credits as well. IRS guidance on clean vehicle credits.

Here are some of the issues presented on this by the IRS. FS-2022-42. The Inflation Reduction Act of 2022 makes several changes to the tax credit provided in Section 30D of the Internal Revenue Code for qualified plug in electric drive motor vehicles, including adding fuel cell vehicles to the Section 30D tax credit. The IRS also added a new credit for previously owned clean vehicles under Section 45W of the code. For purposes of the new clean vehicle credit, a new clean vehicle is a clean vehicle placed in service on or after January 1, 2023, that is acquired by a taxpayer for original use. The vehicle cannot be acquired for resale purposes, it must be manufactured by a qualified manufacturer, and it must meet the definition of a motor vehicle under Title Two of the Clean Air Act, that is any vehicle manufactured primarily for use on public streets, roads and highways. It must also have at least four wheels. It also must have a gross weight rating of less than 14,000 pounds. It must be powered to a significant extent by a electric motor with a battery capacity of 7 kilowatt hours or more.

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