IRS Addresses EV Credit Matters for 2023

The Inflation Reduction Act of 2022 was designed to make switching to an electric vehicle less of a financial burden. But, there has been significant confusion around some of the requirements in the new Clean Vehicle Credit.

The Clean Vehicle Credit can be worth up to $7,500 for qualifying EVs purchased and put into service on or after January 1, 2023. For the purposes of this credit, the taxpayer must take possession of the vehicle after January 1, 2023.

(The Clean Vehicle Credit also existed previously, for vehicles purchased prior to 2023, but those requirements are different.)

There are limits to the 2023 Clean Vehicle Credit. It cannot be claimed by taxpayers with modified adjusted gross income (MAGI) that exceeds $150,000 for single filers or $300,000 for couples filing a joint return.

Also, qualifying vehicles have to meet a wide range of requirements, including restrictions on where the vehicle was assembled, the MSRP, and how the vehicle is classified. The IRS has released proposed guidance on all of the 2023 Clean Vehicle Credit requirements in Notice 2023-1, and updated IRS webpages for the Clean Vehicle Credit and qualified manufacturers.

Interested in taking advantage of the Clean Vehicle Credit in 2023? Schreiber Accounting and Advisory can help with comprehensive tax preparation and planning services. Contact the firm for more information.

Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.