Plug-in electric vehicles can save fuel costs and get a credit for your company
Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles.
For vehicles acquired after December 31, 2009, the credit is equal to $2,500. A vehicle which draws energy from a battery with at least 5 kilowatt hours of capacity, will receive $417 more. Vehicle owners receive an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.
The credit begins to phase out for a manufacturer’s vehicles when 200,000 qualifying vehicles have been sold. Section 30D originally was enacted in the Energy Improvement and Extension Act of 2008. The vehicles must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must commence with the taxpayer. For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer.
The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.
For additional details visit the IRS website by clicking here.