New vehicles for qualified plug-in electric drive motor vehicles credit

An updated IRS list of vehicles eligible for the qualified plug-in electric drive motor vehicle credit shows a few models eligible for the full $7,500.

March 05, 2020

The IRS has recently released an updated listing of vehicles that qualify for the §30D qualified plug-in electric drive motor vehicle credit, a nonrefundable credit of $2,500 to $7,500 depending on battery capacity. The qualified plug-in electric drive motor vehicle credit is claimed on . Several late model cars from Honda, Hyundai, Kia, Mini USA, Nissan, Toyota, and Volkswagen qualify for the maximum $7,500 credit. The credit phases out in the second quarter after the manufacturer sells 200,000 vehicles. Tesla and General Motors vehicles are currently in the phaseout stage and subject to reduced credits. See the Form 8936 instructions.

Note: the credit for qualified two-wheeled plug-in electric vehicles is claimed on this form as well. This credit was recently extended retroactively and is now available for tax years 2018 through 2020.

Taxpayers may claim the full amount of the credit up to the end of the first quarter after the quarter in which the manufacturer records its sale of the 200,000th qualified vehicle. For the second and third calendar quarters, taxpayers may claim 50% of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25% of the credit. No credit is allowed after the fifth quarter.

Claiming the Qualified Plug-In Electric Drive Vehicle Credit

The vehicle credit ranges from $2,500 to $7,500, depending on battery capacity and other factors. The credit is claimed on Form 8936Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-In Electric Vehicles), for the year the vehicle is placed in service.

If the taxpayer cannot use the part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years.

The credit attributable to depreciable property (vehicles used for business or investment purposes) is treated as a general business credit and reported on Form 3800General Business Credit.

For more on energy-efficient incentives, see the Insights article, "Green upgrades: Three financial incentives for taxpayers looking to make energy-efficient improvements"

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