You may have heard that the newly enacted Inflation Reduction Act includes an expanded tax credit for electric vehicles. 

Although this personal credit has gotten most of the publicity, the new law launched a new commercial clean vehicle credit—specifically for business-use electric vehicles. And it’s much better than the credit for personal-use electric cars.

The new law’s personal-use electric vehicle credit is now called the clean vehicle credit. It comes with many new restrictions:

• It is available only if your adjusted gross income is at most $300,000 (married, filing jointly) or $150,000 (single).
• It applies only to electric vehicles with a manufacturer’s suggested retail price below $80,000 for vans, SUVs, and pickup trucks or $55,000 for other vehicles.
• It must pass complex tax-law-defined North American assembly and sourcing requirements that prevent many electric vehicles from qualifying.
  

Luckily, no clean vehicle credit restrictions apply if you purchase or lease an electric vehicle for business use in 2023 or later.

Instead, you can qualify for the business-use electric vehicle credit. The credit is available for fully electric cars, plug-in hybrid electric vehicles, and fuel cell vehicles.

The maximum credit is $7,500 for electric vehicles with a gross vehicle weight rating of less than 14,000 pounds and a whopping $40,000 for electric vehicles with a GVWR of 14,000 pounds or more.

If you have any questions or need our assistance, please call us at 973-339-7773, send us an email at hello@firm1040.com, or schedule a quick chat.