After a many-months-long wait, the IRS has finally issued its proposed regulations for the new clean vehicle tax credit and the commercial clean vehicle credit.
With this new IRS guidance and its previous guidance, we have answers to most of the questions about how the electric vehicle (EV) credits work.
The credits are available for qualifying fully electric cars, plug-in hybrid EVs (PHEVs), and fuel cell vehicles.
There are four ways you can potentially benefit from a federal tax credit for an EV you place in service in 2023 or later:
1.
Purchase an EV, and claim the clean vehicle credit.
2.
Lease an EV, and benefit from the lessor’s EV discount.
3.
Purchase a used EV that qualifies for the used EV tax credit.
4.
Purchase an EV for business use, and claim the new commercial clean vehicle tax credit.
Clean Vehicle Credit
The new clean vehicle credit went into effect January 1, 2023, and continues through 2032. The maximum credit is $7,500. This credit may be claimed whether a qualifying EV is used for personal or business driving, or for both.
The credit is non-refundable (limited to the purchaser’s tax liability) if the EV is used for personal driving. But to the extent the EV is used for business driving, the credit becomes part of the general business credit and may ... Log in to view full article.
