IRS Guidance on IRA’s Clean Vehicle Credit
These recently-published regulations clarify how clean vehicles qualify for tax credits
The Inflation Reduction Act (IRA) extended and expanded the Section 30D Clean Vehicle (CV) Credit, previously known as the Electric Vehicle (EV) Credit. The credit now covers “clean vehicles,” which include plug-in hybrids, hydrogen fuel cell cars and EVs.
The IRS recently (4/17/23) published regulations to clarify how a CV can qualify for the tax credit. These new regulations effectively limit the number of currently available models that qualify, due to strict sourcing requirements that will apply to CVs that buyers take delivery of, on or after April 18, 2023. The federal government is taking steps to help taxpayers identify eligible vehicles.
The previous EV Credit
The Sec. 30D EV Credit has been available since 2008. Prior to the Inflation Reduction Act, it started at $2,500, with a maximum credit of $7,500. Note that the EV Credit remains available for qualifying vehicles placed in service on or before April 17, 2023. It was also subject to a cap based on the number of qualifying vehicles a manufacturer had produced. Because of this cap, some popular EVs, including those made by Tesla, Toyota and General Motors were no longer eligible for the EV credit.
Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.