Lease-to-own electric trucks are becoming increasingly popular, especially with new electric vehicles. Tax incentives for new EVs purchased in 2022 or earlier can offer significant benefits to buyers. According to Section 30D of the Internal Revenue Code, a clean vehicle tax credit of up to $7,500 may be available.
Clean Vehicle Credit: Key Details
The tax credit is calculated as follows:
- $2,917 for vehicles with a battery capacity of at least 5 kilowatt-hours (kWh).
- Plus $417 for each kWh exceeding 5 kilowatt-hours.
The maximum credit is $7,500 and is non-refundable. This means you can only get a credit up to the amount you owe in taxes. Any unused credit cannot be carried forward to future tax years.
You can also learn more about the used clean vehicle credit and the new clean vehicle credit for vehicles purchased in 2023 or later.
Eligibility Requirements for the Credit
Individuals and businesses may be eligible for a tax credit of up to $7,500 for purchasing a new car or light truck that meets certain standards.
Mandatory conditions:
- Purchase the vehicle for personal use, not for resale.
- Use it primarily in the U.S.
Vehicle Eligibility Criteria
The vehicle must meet the following criteria:
- Be plug-in capable.
- Have a gross vehicle weight rating of less than 14,000 pounds.
- Be manufactured by a manufacturer that has not sold more than 200,000 electric vehicles in the U.S.
You can find the vehicle’s weight rating on the vehicle’s doorjamb sticker.
North American Assembly Requirement (For Vehicles Purchased After August 16, 2022)
For electric vehicles purchased and received from August 17, 2022, to December 31, 2022, in addition to the rules above, the vehicle must undergo final assembly in North America.
To check if your vehicle meets the assembly requirement, visit the Department of Energy’s website on Final Assembly in North America. Here you can:
- Confirm the assembly location for your specific vehicle using a VIN decoder tool.
- Check the list of Model Year 2022 and early Model Year 2023 Clean Vehicle Models.
Because some models are produced at multiple locations, you should check both criteria for any particular vehicle.
Purchase Date vs. Delivery Date
If you entered into a written binding contract to purchase a vehicle after December 31, 2021, and before August 16, 2022, but take possession on or after August 16, 2022, you may elect to claim the credit based on the prior rules. To elect the prior rules, you must claim the credit on your 2022 tax return after you take possession of the vehicle.
Written Binding Contract
A written binding contract is generally:
- Enforceable under state law.
- Does not limit damages to a specified amount (for example, limited to forfeiture of a deposit).
Indications of a binding contract include a significant non-refundable deposit or down payment.
How to Claim the Credit
To claim the credit for a vehicle purchased in 2022, file Form 8936, Clean Vehicle Credits, with your 2022 tax return. You will need to provide the vehicle identification number (VIN).
Vehicles Purchased Before 2022
If you missed claiming the credit for an electric vehicle purchased before 2022, you can claim it by filing an amended return for the tax year you owned the vehicle. The credit for two-wheeled plug-in electric vehicles expired in 2022.
