26 USC 30 - Clean vehicle credit

View all text of Subpart B [§ 27 - § 30D]

§ 30D. Clean vehicle credit

(a) Allowance of credit

(b) Per vehicle dollar limitation

(1) In general

(2) Critical minerals

(3) Battery components

(1) Business credit treated as part of general business credit

(2) Personal credit

(d) New clean vehicleFor purposes of this section—

(1) In generalThe term “new clean vehicle” means a motor vehicle—

(A) the original use of which commences with the taxpayer,

(B) which is acquired for use or lease by the taxpayer and not for resale,

(D) which is treated as a motor vehicle for purposes of title II of the Clean Air Act,

(E) which has a gross vehicle weight rating of less than 14,000 pounds,

(F) which is propelled to a significant extent by an electric motor which draws electricity from a battery which—

(i) has a capacity of not less than 7 kilowatt hours, and

(ii) is capable of being recharged from an external source of electricity,

(G) the final assembly of which occurs within North America, and

(H) for which the person who sells any vehicle to the taxpayer furnishes a report to the taxpayer and to the Secretary, at such time and in such manner as the Secretary shall provide, containing—

(i) the name and taxpayer identification number of the taxpayer,

(ii) the vehicle identification number of the vehicle, unless, in accordance with any applicable rules promulgated by the Secretary of Transportation, the vehicle is not assigned such a number,

(iii) the battery capacity of the vehicle,

(iv) verification that original use of the vehicle commences with the taxpayer,

(v) the maximum credit under this section allowable to the taxpayer with respect to the vehicle, and

(vi) in the case of a taxpayer who makes an election under subsection (g)(1), any amount described in subsection (g)(2)(C) which has been provided to such taxpayer.

(2) Motor vehicle

(3) Qualified manufacturer

(4) Battery capacity

(5) Final assembly

(6) New qualified fuel cell motor vehicle

(7) Excluded entitiesFor purposes of this section, the term “new clean vehicle” shall not include—

(A) any vehicle placed in service after December 31, 2024, with respect to which any of the applicable critical minerals contained in the battery of such vehicle (as described in subsection (e)(1)(A)) were extracted, processed, or recycled by a foreign entity of concern (as defined in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5))), or

(B) any vehicle placed in service after December 31, 2023, with respect to which any of the components contained in the battery of such vehicle (as described in subsection (e)(2)(A)) were manufactured or assembled by a foreign entity of concern (as so defined).

(e) Critical mineral and battery component requirements

(1) Critical minerals requirement

(A) In generalThe requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the applicable critical minerals (as defined in section 45X(c)(6)) contained in such battery that were—

(i) extracted or processed—(I) in the United States, or(II) in any country with which the United States has a free trade agreement in effect, or

(ii) recycled in North America,

is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).

(B) Applicable percentageFor purposes of subparagraph (A), the applicable percentage shall be—

(i) in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before January 1, 2024, 40 percent,

(ii) in the case of a vehicle placed in service during calendar year 2024, 50 percent,

(iii) in the case of a vehicle placed in service during calendar year 2025, 60 percent,

(iv) in the case of a vehicle placed in service during calendar year 2026, 70 percent, and

(v) in the case of a vehicle placed in service after December 31, 2026, 80 percent.

(2) Battery components

(A) In general

(B) Applicable percentageFor purposes of subparagraph (A), the applicable percentage shall be—

(i) in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before January 1, 2024, 50 percent,

(ii) in the case of a vehicle placed in service during calendar year 2024 or 2025, 60 percent,

(iii) in the case of a vehicle placed in service during calendar year 2026, 70 percent,

(iv) in the case of a vehicle placed in service during calendar year 2027, 80 percent,

(v) in the case of a vehicle placed in service during calendar year 2028, 90 percent,

(vi) in the case of a vehicle placed in service after December 31, 2028, 100 percent.

(3) Regulations and guidance

(A) In general

(B) Deadline for proposed guidance

(f) Special rules

(1) Basis reduction

(2) No double benefit

[(3) Repealed. Pub. L. 117–169, title I, § 13401(g)(2)(B)(i), Aug. 16, 2022, 136 Stat. 1960]

(4) Property used outside United States not qualified

(5) Recapture

(6) Election not to take credit

(7) Interaction with air quality and motor vehicle safety standardsA vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with—

(A) the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and

(B) the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code.

(8) One credit per vehicle

(9) VIN requirement

(10) Limitation based on modified adjusted gross income

(A) In generalNo credit shall be allowed under subsection (a) for any taxable year if—

(i) the lesser of—(I) the modified adjusted gross income of the taxpayer for such taxable year, or(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds

(ii) the threshold amount.

(B) Threshold amountFor purposes of subparagraph (A)(ii), the threshold amount shall be—

(i) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $300,000,

(ii) in the case of a head of household (as defined in section 2(b)), $225,000, and

(iii) in the case of a taxpayer not described in clause (i) or (ii), $150,000.

(11) Manufacturer’s suggested retail price limitation

(A) In general

(B) Applicable limitationFor purposes of subparagraph (A), the applicable limitation for each vehicle classification is as follows:

(i) Vans

(ii) Sport utility vehicles

(iii) Pickup trucks

(iv) Other

(g) Transfer of credit

(1) In general

(2) Eligible entityFor purposes of this subsection, the term “eligible entity” means, with respect to the vehicle for which the credit is allowed under subsection (a), the dealer which sold such vehicle to the taxpayer and has—

(A) subject to paragraph (4), registered with the Secretary for purposes of this paragraph, at such time, and in such form and manner, as the Secretary may prescribe,

(B) prior to the election described in paragraph (1) and not later than at the time of such sale, disclosed to the taxpayer purchasing such vehicle—

(i) the manufacturer’s suggested retail price,

(ii) the value of the credit allowed and any other incentive available for the purchase of such vehicle, and

(iii) the amount provided by the dealer to such taxpayer as a condition of the election described in paragraph (1),

(C) not later than at the time of such sale, made payment to such taxpayer (whether in cash or in the form of a partial payment or down payment for the purchase of such vehicle) in an amount equal to the credit otherwise allowable to such taxpayer, and

(D) with respect to any incentive otherwise available for the purchase of a vehicle for which a credit is allowed under this section, including any incentive in the form of a rebate or discount provided by the dealer or manufacturer, ensured that—

(i) the availability or use of such incentive shall not limit the ability of a taxpayer to make an election described in paragraph (1), and

(ii) such election shall not limit the value or use of such incentive.

(3) Timing

(4) Revocation of registration

(5) Tax treatment of paymentsWith respect to any payment described in paragraph (2)(C), such payment—

(A) shall not be includible in the gross income of the taxpayer, and

(B) with respect to the dealer, shall not be deductible under this title.

(6) Application of certain other requirementsIn the case of any election under paragraph (1) with respect to any vehicle—

(A) the requirements of paragraphs (1) and (2) of subsection (f) shall apply to the taxpayer who acquired the vehicle in the same manner as if the credit determined under this section with respect to such vehicle were allowed to such taxpayer,

(B) paragraph (6) of such subsection shall not apply, and

(C) the requirement of paragraph (9) of such subsection (f) shall be treated as satisfied if the eligible entity provides the vehicle identification number of such vehicle to the Secretary in such manner as the Secretary may provide.

(7) Advance payment to registered dealers

(A) In general

(B) Excessive payments

(8) Dealer

(9) Indian tribal government

(10) Recapture

(h) Termination

(Added Pub. L. 110–343, div. B, title II, § 205(a), Oct. 3, 2008, 122 Stat. 3835; amended Pub. L. 111–5, div. B, title I, § 1141(a), Feb. 17, 2009, 123 Stat. 326; Pub. L. 111–148, title X, § 10909(b)(2)(H), (c), Mar. 23, 2010, 124 Stat. 1023; Pub. L. 111–312, title I, § 101(b)(1), Dec. 17, 2010, 124 Stat. 3298; Pub. L. 112–240, title I, § 104(c)(2)(I), title IV, § 403(a), (b), Jan. 2, 2013, 126 Stat. 2322, 2337, 2338; Pub. L. 113–295, div. A, title II, § 209(e), Dec. 19, 2014, 128 Stat. 4028; Pub. L. 114–113, div. Q, title I, § 183(a), Dec. 18, 2015, 129 Stat. 3072; Pub. L. 115–123, div. D, title I, § 40405(a), Feb. 9, 2018, 132 Stat. 148; Pub. L. 116–94, div. Q, title I, § 126(a), Dec. 20, 2019, 133 Stat. 3231; Pub. L. 116–260, div. EE, title I, § 144(a), Dec. 27, 2020, 134 Stat. 3054; Pub. L. 117–169, title I, § 13401(a)–(i)(1), Aug. 16, 2022, 136 Stat. 1954–1961.)