The IRS recently issued new guidance on electric vehicles. There are four ways you can potentially benefit from a federal tax credit placed in service in 2023 or later:
Purchase an EV, and claim the clean vehicle credit.
Lease an EV & benefit from the lessor’s EV discount.
Purchase a used EV that qualifies for the used EV tax credit.
Purchase an EV for business use & claim the new commercial clean vehicle tax credit.
The new clean vehicle credit is available through 2032, with a maximum credit of $7,500.
To qualify for the clean vehicle credit, you must meet specific criteria The credit amount for vehicles delivered on or after April 18, 2023, depends on the vehicle meeting critical minerals sourcing and/or battery components sourcing requirements.
If you can’t find an EV that qualifies, you can lease an EV from a leasing company that can claim up to a $7,500 commercial clean vehicle tax credit. The leasing company may then pass on all or part of the credit to you through reduced leasing costs.
For used EV purchases, you can earn a credit of up to $4,000.
If you purchase an EV for business use, you can qualify for the commercial clean vehicle tax credit, making it easier to qualify for this credit starting April 18, 2023.
To claim an EV credit, the seller must complete a seller’s report and provide a copy to you and the IRS. For the clean vehicle credit, you will file IRS Form 8936; for the commercial clean vehicle credit, you will file IRS Form 8936-A.