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Vehicle Plug In Credit

New electric and plug-in hybrid vehicle purchases may qualify for a tax credit.

Commonly referred to as IRCD 30D or the Plug-In Electric Drive Vehicle Credit.

Do I Qualify for the Vehicle Plug In Credit?

To qualify for the credit the vehicle must be newly purchased and used predominantly in the U.S. A qualified vehicle must also draw propulsion energy from a battery with at least 5 kilowatt hours of capacity.

2022 Vehicle Plug In Credit Details

The Vehicle Plug-In Credit is a nonrefundable tax credit for vehicles, which includes two wheeled vehicles purchased before January 1, 2022.

The maximum credit is currently $7,500 and the vehicle you buy has to:

• Have been purchased after December 31, 2009.
• Weigh less than 14,000 pounds.
• Be at least partially powered by a battery with 5 kilowatt-hours of capacity or more for four wheeled vehicles (hybrid vehicles that don’t plug in aren’t eligible).
• Be a new vehicle purchased, not leased, and assembled in the United States.

Also, the manufacturer of your vehicle, can’t have sold more than 200,000 units since January 1, 2010, in the United States for you to get the full credit.

Once it does, the credit will start phasing out and be 50% of the total possible amount, then 25%, then ultimately 0%, depending on in which quarter you made your purchase.

Vehicles used for business purposes generate a business credit and reduce the individual credit based on the percentage of time used for each purpose.

Keep in mind, all the information regarding credit values and dates vehicles were sold has to come from a trusted/qualified source.

Vehicle Plug In Credit

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• Directly reduces tax liability.
• Requires little effort to implement the tax savings.


• Tax liability may limit total credit value.
• Desired vehicle may not qualify for the credit.
• Vehicle must be purchased, not leased.

Assumptions When Taking the Vehicle Plug In Credit

• None noted.

Conflicting Strategies

• None noted.

Requirements to Claim the Vehicle Plug In Credit

• Purchased after December 31, 2009.
• Weigh less than 14,000 pounds.
• Powered (at least partially) by a battery with at least 5 kilowatt hours of capacity.
• Has not yet sold 200,000 units in the United States.

Business Entities That Can Claim the Vehicle Plug In Credit

• Schedule C
• S Corporation
• C Corporation
• Partnership

The material discussed on this page is meant for general illustration and/or informational purposes only and is not to be construed as investment, tax, or legal advice. You must exercise your own independent professional judgment, recognizing that advice should not be based on unreasonable factual or legal assumptions or unreasonably rely upon representations of the client or others. Further, any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.

Prosperity Tax Advisors
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