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

The IRS has updated for 2020 and 2021 its listing of vehicles that qualify for the up to $7,500 qualified plug-in electric drive motor vehicle credit.

July 15, 2020

The IRS has updated for 2020-2021 its 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 Form 8936. Some of the models added, with their available credit amounts are:

  • 2020 Audi A8L PHEV and Q5 PHEV (both $6,712)
  • 2020 Ford Escape plug-in hybrid ($6,843)
  • 2020 Mini Cooper SE hardtop 2 door and 2021 Mini Cooper SE hardtop (both $7,500)
  • 2021 Toyota Rav 4 prime plug-in hybrid ($7,500)

Also, the 2020 models of many manufacturers continue to certify for the credit, including the Hyundai Ioniq plug-in hybrid electric vehicle ($4,543), Hyundai Kona electric vehicle ($7,500), and Nissan LEAF ($7,500). See the listing for all available vehicles.

The credit phases out after a manufacturer has sold more than 200,000 qualifying vehicles, which to date has been done by General Motors and Tesla. GM vehicles acquired after March 31, 2020, and Tesla vehicles acquired after December 31, 2019, do not qualify for the credit.

Note: The credit for qualified two-wheeled plug-in electric vehicles is claimed on this form as well. This credit is 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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