{"id":958,"date":"2024-01-16T12:59:03","date_gmt":"2024-01-16T12:59:03","guid":{"rendered":"https:\/\/www.danaleecpa.com\/blog\/?p=958"},"modified":"2024-04-16T11:19:06","modified_gmt":"2024-04-16T11:19:06","slug":"qualified-commercial-vehicle-credit","status":"publish","type":"post","link":"https:\/\/www.danaleecpa.com\/blog\/qualified-commercial-vehicle-credit\/","title":{"rendered":"Qualified Commercial Vehicle Credit"},"content":{"rendered":"<p>If you purchased or you are considering the acquisition of a qualified commercial vehicle, or if such a purchase is in your future plans, this article is for you. In case you<a href=\"https:\/\/www.irs.gov\/newsroom\/businesses-and-tax-exempt-organizations-may-qualify-for-the-new-commercial-clean-vehicle-credit#:~:text=Businesses%20and%20tax-exempt%20organizations%20that%20buy%20a%20qualified,on%20the%20credit%20than%20you%20owe%20in%20taxes.\"><strong> own a business or a tax exempt organization<\/strong><\/a> and you are looking for a way to save money on your taxes, you may want to consider the qualified commercial vehicle credit, a tax credit of up to $40,000. A <a href=\"https:\/\/www.irs.gov\/pub\/taxpros\/fs-2023-22.pdf\">qualified commercial vehicle<\/a> is a vehicle that meets certain criteria and is used for business purposes.<\/p>\n<h2>Amount Of The Credit<\/h2>\n<p>The credit is calculated as the lesser of:<\/p>\n<ul>\n<li>15% of you basis (or 30% if the vehicle doesn&#8217;t run on gas or diesel),<\/li>\n<li>the incremental cost of the vehicle.<\/li>\n<\/ul>\n<p>However, there&#8217;s a limit to how much credit you can get. If the vehicle&#8217;s gross weight is less than 14,000 pounds, the maximum credit is $7,500. For all other vehicles, the maximum credit is $40,000.<\/p>\n<h2>What Is A Qualified Commercial Vehicle?<\/h2>\n<p>A qualified commercial vehicle is a vehicle that:<\/p>\n<ul>\n<li>it is subject to depreciation allowance, with the exception of tax-exempt organizations and it is not subject to a lease,<\/li>\n<li>it is acquired for use in your trade or business, not for resale,<\/li>\n<li>it is primarily used in US,<\/li>\n<li>it must be manufactured by a company that is recognized as a qualified manufacturer according to <a href=\"https:\/\/uscode.house.gov\/view.xhtml?req=(title:26%20section:30D%20edition:prelim)\">IRC 30D(d)(1)(C),<\/a><\/li>\n<li>the vehicle should not have been previously allowed a credit under sections <a href=\"https:\/\/www.irs.gov\/credits-deductions\/credits-for-new-clean-vehicles-purchased-in-2023-or-after\">30D<\/a> (the new clean vehicle credit) or <a href=\"https:\/\/www.irs.gov\/credits-deductions\/commercial-clean-vehicle-credit\">45W<\/a> (the commercial clean vehicle credit),<\/li>\n<li>it is considered a motor vehicle under title II of the Clean Air Act and is mainly used on public roads (excluding vehicles that only operate on rails),<\/li>\n<li>it is mobile machinery as defined in <a href=\"https:\/\/uscode.house.gov\/view.xhtml?req=(title:26%20section:4053%20edition:prelim)\">IRC 4053(8)<\/a>, including vehicles not designed to transport a load over a public highway,<\/li>\n<li>finally, the vehicle or machinery must be one of the following:\n<ul>\n<li>a plug-in electric vehicle that gets significant power from an electric motor with a battery capacity of at least:\n<ul>\n<li>7 kilowatt hours if the gross vehicle weight rating (GVWR) is under 14,000 pounds,<\/li>\n<li>15 kilowatt hours if the GVWR is 14,000 pounds or more.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li>a fuel cell motor vehicle that meets the requirements of <a href=\"https:\/\/uscode.house.gov\/view.xhtml?req=(title:26%20section:30B%20edition:prelim)\">IRC 30B(b)(3)(A) and (B)<\/a>.<\/li>\n<\/ul>\n<p><b>For example <\/b>qualified commercial vehicles include vans, pickups, SUVs and trucks.<\/p>\n<h2>How to Claim The Credit On Your Tax Return?<\/h2>\n<p>For businesses the credit is <a href=\"https:\/\/www.irs.gov\/newsroom\/businesses-and-tax-exempt-organizations-may-qualify-for-the-new-commercial-clean-vehicle-credit#:~:text=Businesses%20and%20tax-exempt%20organizations%20that%20buy%20a%20qualified,on%20the%20credit%20than%20you%20owe%20in%20taxes.\"><strong>nonrefundable<\/strong><\/a>, which means that if the credit exceeds your tax liability, you can not get the excess amount as a refund. On the other hand, there is <strong>no limit<\/strong> on the number of credits your business can claim and you can carry over the credit as a general business credit.<\/p>\n<p>To claim the credit, you need to file <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f8936a.pdf\">Form 8936-A<\/a>, Qualified Commercial Clean Vehicle Credit, with your tax return. For each vehicle that qualifies for the credit, you should use a separate Schedule 1 (Form 8936-A) to <a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-8936-a\">determine<\/a> the credit amount.<\/p>\n<p>Meanwhile, you can find more information and instructions on the IRS <a href=\"https:\/\/www.irs.gov\/credits-deductions\/commercial-clean-vehicle-credit\">website<\/a>.<\/p>\n<h2>Depreciable Basis<\/h2>\n<p>When you set up your asset for depreciation, make sure that you reduce the vehicle depreciable basis by the amount of the commercial clean vehicle credit you receive.<\/p>\n<h2>Qualified Commercial Vehicle Credit VS Clean Vehicle Credit<\/h2>\n<p>These credits are both tax incentives offered by the IRS to promote the use of environmentally friendly vehicles. However, they have different requirements.<\/p>\n<p>The Qualified Commercial Vehicle Credit is for businesses and tax-exempt organizations that purchase qualified commercial clean vehicles. On the other hand, the Clean Vehicle Credit is available to individuals and businesses that purchase new, qualified plug-in electric vehicles or fuel cell vehicles. To find out more about the Clean Vehicle Credit, you can read our article <a href=\"https:\/\/www.danaleecpa.com\/blog\/clean-vehicle-credit\/\"><em><strong>here<\/strong><\/em><\/a>.<\/p>\n<p>We advise you to consult with a tax professional for more specific information about these credits and how they may apply to your situation.<\/p>\n<h2>Conclusion<\/h2>\n<p>In conclusion, purchasing a qualified commercial vehicle can be a smart move for your business and your taxes. You can save money on your tax bill by claiming a credit. If you are interested in buying a qualified commercial vehicle, make sure to consult with your tax professional and check the IRS website for the latest updates and requirements.<\/p>\n<p>Taxes are complicated, especially if you have a business. If you need help with your business books, tax planning and filing your taxes, we are here to help. <a href=\"https:\/\/www.danaleecpa.com\/\">Click here<\/a> to schedule an appointment.<\/p>\n<p>This material is for informational purposes only. It does not constitute tax, legal or accounting advice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you purchased or you are considering the acquisition of a qualified commercial vehicle, or if such a purchase is in your future plans, this article is for you. In case you own a business or a tax exempt organization and you are looking for a way to save money on your taxes, you may [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-958","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts\/958","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/comments?post=958"}],"version-history":[{"count":17,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts\/958\/revisions"}],"predecessor-version":[{"id":1040,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts\/958\/revisions\/1040"}],"wp:attachment":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/media?parent=958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/categories?post=958"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/tags?post=958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}