26 USC 25E - Previously-owned clean vehicles

U.S Code last checked for updates: Nov 22, 2024

§ 25E.

Previously-owned clean vehicles

(a)

Allowance of credit

In the case of a qualified buyer who during a taxable year places in service a previously-owned clean vehicle, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the lesser of—

(1)

$4,000, or

(2)

the amount equal to 30 percent of the sale price with respect to such vehicle.

(b)

Limitation based on modified adjusted gross income

(1)

In general

No credit shall be allowed under subsection (a) for any taxable year if—

(A)

the lesser of—

(i)

the modified adjusted gross income of the taxpayer for such taxable year, or

(ii)

the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds

(B)

the threshold amount.

(2)

Threshold amount

For purposes of paragraph (1)(B), the threshold amount shall be—

(A)

in the case of a joint return or a surviving spouse (as defined in section 2(a)), $150,000,

(B)

in the case of a head of household (as defined in section 2(b)), $112,500, and

(C)

in the case of a taxpayer not described in subparagraph (A) or (B), $75,000.

(3)

Modified adjusted gross income

(c)

Definitions

For purposes of this section—

(1)

Previously-owned clean vehicle

The term “previously-owned clean vehicle” means, with respect to a taxpayer, a motor vehicle—

(A)

the model year of which is at least 2 years earlier than the calendar year in which the taxpayer acquires such vehicle,

(B)

the original use of which commences with a person other than the taxpayer,

(C)

which is acquired by the taxpayer in a qualified sale, and

(D)

which—

(i)

meets the requirements of subparagraphs (C), (D), (E), (F), and (H) (except for clause (iv) thereof) of section 30D(d)(1), or

(ii)

is a motor vehicle which—

(I)

satisfies the requirements under subparagraphs (A) and (B) of section 30B(b)(3), and

(II)

has a gross vehicle weight rating of less than 14,000 pounds.

(2)

Qualified sale

The term “qualified sale” means a sale of a motor vehicle—

(A)

by a dealer (as defined in section 30D(g)(8)),

(B)

for a sale price which does not exceed $25,000, and

(C)

which is the first transfer since the date of the enactment of this section to a qualified buyer other than the person with whom the original use of such vehicle commenced.

(3)

Qualified buyer

The term “qualified buyer” means, with respect to a sale of a motor vehicle, a taxpayer—

(A)

who is an individual,

(B)

who purchases such vehicle for use and not for resale,

(C)

with respect to whom no deduction is allowable with respect to another taxpayer under section 151, and

(D)

who has not been allowed a credit under this section for any sale during the 3-year period ending on the date of the sale of such vehicle.

(4)

Motor vehicle; capacity

(d)

VIN number requirement

(e)

Application of certain rules

(f)

Transfer of credit

(g)

Termination

(Added and amended Pub. L. 117–169, title I, § 13402(a), (b), Aug. 16, 2022, 136 Stat. 1962, 1963.)

cite as: 26 USC 25E