Make sure you read the fine print on this tax credit BEFORE you buy a car!
The Internal Revenue Service today issued a proposed regulation related to certain requirements that must be met for the new clean vehicle credit.
The Inflation Reduction Act (IRA) allows a maximum credit of $7,500 per vehicle, consisting of $3,750 in the case of a vehicle that meets certain requirements relating to critical minerals and $3,750 in the case of a vehicle that meets certain requirements relating to battery components.
The critical mineral and battery component requirements will apply to vehicles placed in service on or after April 18, 2023.
New clean vehicles placed in service on or after April 18, 2023, are subject to the critical mineral and battery component requirements even if the vehicle was ordered or purchased before April 18, 2023. A vehicle’s eligibility for the new clean vehicle credit is generally based on the rules that apply as of the date a vehicle is placed in service, meaning the date the taxpayer takes delivery of the vehicle. This is critical. One day earlier and NO CREDIT.
The IRS updated the frequently-asked-questions (FAQs) for the clean vehicle credits.
Fact Sheet 2023-08PDF updates FAQs related to new, previously owned and qualified commercial clean vehicles.
So before you commit to your new vehicle, make sure that it qualifies for the credit and that the timing of taking delivery match the dates in order to claim the credit.
If you have any concerns or questions, please reach out to me and let’s discuss.
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