| Program Name: | Commercial Clean Vehicle Tax Credit (IRC 45W) |
| Program Sponsor: | U.S. Internal Revenue Service |
| Program Type: | Tax Incentives |
| Technology: | Transportation |
| Fuel: | Electricity |
| Eligibility: | Businesses and tax-exempt organizations purchasing qualified commercial clean vehicles |
| Cost: | N/A |
Description
Businesses and tax-exempt organizations purchasing qualified commercial clean vehicles may be eligible for a federal tax credit under Internal Revenue Code (IRC) 45W. The Commercial Clean Vehicle Tax Credit can be up to $40,000 and is based on either 15% of the vehicle’s basis (or 30% for non-gas/diesel vehicles) or the incremental cost of the vehicle, with a maximum credit of $7,500 for vehicles with GVWR under 14,000 pounds and $40,000 for larger vehicles.
Eligibility
Businesses and tax-exempt organizations qualify for the credit, and there is no limit on the number of credits a business can claim. The credits are nonrefundable for businesses and can be carried over as a general business credit.
How the Program Works
Qualified vehicles must meet specific criteria, including being subject to depreciation allowance, made by a qualified manufacturer as defined in IRC 30D(d)(1)(C), used for business purposes, primarily used in the United States, and not having received credits under IRC sections 30D or 45W. The vehicle must be either a plug-in electric vehicle or a fuel cell motor vehicle meeting specified requirements in IRC 30B(b)(3)(A) and (B).
Additional Information on Commercial Vehicles:
- To qualify, a commercial vehicle must either be:
- Treated as a motor vehicle for purposes of title II of the Clean Air Act and manufactured primarily for use on public roads, or
- Mobile machinery as defined in IRC 4053(8)
- The tax credit limits are $7,500 for vehicles under 14,000 lbs. and $40,000 for vehicles above 14,000 lbs.
- Eligible technologies include plug-in hybrid electric vehicles (up to 15% of cost) and battery-electric or fuel cell electric vehicles (up to 30% of cost).
- Commercial electric vehicles must be listed on the IRS Index of Qualified Manufacturers, meet specific design criteria, and be used for business activities.
How to Apply
The IRS is in the process of finalizing a form for claiming the credit. Applicants will need to provide the vehicle’s VIN and the credit amount. The depreciable basis of the vehicle is reduced by the amount of the commercial clean vehicle credit received.
Contact Information:
Further details and updates can be found on the IRS website. For additional information, applicants can check the IRS Index of Qualified Manufacturers for eligible commercial electric vehicles.
Internal Revenue Service (IRS)
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
1(800) 829-1040