The IRS recently released guidance (Rev. Proc. 2022-42), setting forth key procedures for manufacturers and sellers of clean vehicles to follow for their vehicles to be eligible for clean vehicle tax incentives enacted or amended under the Inflation Reduction Act of 2022 (IRA).
Manufacturers producing vehicles potentially eligible for the clean vehicle credit under Section 30D, the credit for qualified commercial clean vehicles under Section 45W, or the credit for previously owned clean vehicles under Section 25E must enter into a written agreement with Treasury and submit periodic written reports to Treasury providing vehicle identification numbers and other information related to each vehicle manufactured that is eligible for a clean vehicle credit.
Rev. Proc. 2022-42 provides guidance for vehicle manufacturers on how to enter into a written agreement with the IRS and how to provide periodic written reports containing specified information related to each manufactured clean vehicle. In addition, the guidance provides procedures for entities selling vehicles to report specified information to the IRS for a vehicle to be eligible for the credit for new or previously owned clean vehicles.
The revenue procedure notes that the written reports submitted by qualified manufacturers for any vehicle the manufacturer asserts is eligible for a credit under Sections 30D, 25E, and/or 45W must contain the following:
- 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, within the meaning of Section 30D(d)(3)
- 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
- Any other information the Treasury Secretary may provide on irs.gov
There are additional requirements for qualified manufacturers seeking the clean vehicle credit under Section 30D, including certifications that the final assembly of the motor vehicle occurred within North America and certifications related to critical mineral and battery component requirements included in the IRA.
In addition, Rev. Proc. 2022-42 provides the language that manufacturers may use to enter into a written agreement with Treasury to become a “qualified manufacturer” for the purposes of the clean vehicle credits under Sections 30D, 25E and 45W.
While Rev. Proc. 2022-42 provides information for manufacturers to certify their vehicles, additional guidance is needed for buyers to be able to claim credits.
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