Gain a clear understanding of the criteria that must be met for manufacturers to benefit from the Clean Vehicle Tax Credit.
What Are the Requirements for Manufacturers to Be Qualified for the New Clean Vehicle Credit?
In addition to meeting the critical mineral and battery component requirements, the new clean vehicle credit is only available for qualified car manufacturers after December 31, 2022, and requires the final assembly of the vehicle to occur in North America after August 16, 2022.
Who Is Considered a Qualified Manufacturer?
A qualified manufacturer means any manufacturer which enters into a written agreement with the Secretary under which such manufacturer agrees to make periodic written reports to the Secretary of Treasury providing vehicle identification numbers and other required vehicle information by the Secretary.
An IRS statement must be signed by a person currently authorized to bind the taxpayer and sent to [email protected]. Absent the written agreement, manufacturers will not qualify for the new clean energy credit, used clean energy credit, or commercial vehicle credit.
After the IRS statement is received, the manufacturer will be required to start providing period written reports.
What Information Must Be Included in the Written Report?
A written report must include the following for the new clean vehicle credit:
- Contain the name, address, and taxpayer identification number of the qualified manufacturer.
- The make, model, model year, and any other appropriate identifiers of the motor vehicle
- Certification that the motor vehicle is made by a qualified manufacturer
- Certification that the motor vehicle is treated as a motor vehicle for purposes of Title II of the Clean Air Act
- The gross vehicle weight rating of the motor vehicle
- The battery capacity of the motor vehicle
- The motor vehicle’s vehicle identification number
- Certification that the motor vehicle is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than 7-kilowatt hours and the battery is capable of being recharged from an external source of electricity or is a new qualified fuel cell motor vehicle
- Certification that the motor vehicle is manufactured primarily for use on public streets, roads, and highways and has at least four wheels
- Certification that the final assembly of the motor vehicle occurred within North America
- Certification of the percentage of the value of the applicable critical minerals contained in the battery from which the electric motor of the vehicle draws electricity that were (i) extracted or processed in the United States, or in any country with which the United States has a free trade agreement in effect, or (ii) recycled in North America.
- Certification of the percentage of the value of the components contained in the battery from which the electric motor of the vehicle draws electricity that were manufactured or assembled in North America
- Whether the motor vehicle is a van, sport utility vehicle, pickup truck, or other vehicle
- The motor vehicle’s manufacturer’s suggested retail price
How Often Must the Manufacturers Report Be Provided to the IRS?
Qualified manufacturers must file the reports with the IRS monthly, by the fifteenth of the month. Qualified manufacturers must email [email protected] indicating their intent to submit monthly reports and the IRS will respond with instructions on how to submit their reporting information.
How Is the Final Assembly Defined?
For purposes of the new clean vehicle credit, final assembly is defined as the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle.
Contact Us
For more information on this topic, please contact a member of Withum’s Tax Services Team.
