Credits for New Clean Vehicles Purchased in 2023 or After BY LANCE J. KINCHEN BREAZEALE, SACHSE & WILSON LLP Internal Revenue Code (IRC) Section 30D provides a tax credit with respect to each new clean vehicle that a taxpayer purchases and places in service. Section 30D has been amended several times, most recently by the Inflation Reduction Act of 2022 (the IRA). The discussion of credits for qualified previously owned or used clean vehicles under IRC §25E is beyond the scope of this article. A taxpayer may qualify for a credit of up to $7,500 under IRC §30D if the taxpayer buys a new, qualified plug-in electric vehicle (EV) or fuel cell electric vehicle (FCEV). The IRA changed the rules for this credit for vehicles purchased from 2023 to 2032. The amount of the credit depends on when the taxpayer placed the vehicle in service, regardless of the purchase date. Prior to the amendments made by the IRA, the base amount of the credit was $2,500 plus $417 for a battery with a capacity of at least five kilowatt hours and an additional $417 for each kilowatt hour of capacity in excess of five kilowatt hours, up to a maximum credit of $7,500 per vehicle. However, the IRA amended IRC §30D to provide a maximum credit of $7,500 per vehicle, consisting of $3,750 in the case of a vehicle that meets certain requirements relating to critical minerals and $3,750 in the case of the vehicle that meets certain requirements 13
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