Credit for New Qualified Alternative Motor Vehicles (Advanced Lean Burn Technology Motor Vehicles and Qualified Hybrid Motor Vehicles)
1/13/2006
On January 13, 2006, the Internal Revenue Service (IRS) issued guidance regarding the tax credits for light-duty (less than 8,500 lbs. GVWR) lean-burn and hybrid electric vehicles. The guidance establishes the procedures that manufacturers must use to certify that their vehicles qualify for the tax credit. The IRS plans to issue additional guidance at a later date to address procedures for qualifying alternative fuel vehicles, fuel cell vehicles, and heavy-duty hybrid vehicles.
The guidance provides procedures whereby a manufacturer may certify to the IRS that its vehicles qualify for the tax credits enacted in EPAct 2005. The guidance also provides procedures for reporting on the total number of qualifying vehicles that have been sold. Upon receiving the required information, the IRS will issue an acknowledgement. A manufacturer that has submitted the proper certification and received an acknowledgement from the IRS may then certify to customers/puchasers that the vehicles qualify for tax credits. For taxpayers to claim the credit, they must place the vehicle in service after December 31, 2005. The taxpayer also must be the original user of the vehicle (first purchaser or lessee) and the vehicle must be predominately used in the U.S.