Uncle Sam didn’t want bikers to miss out on the tax incentives enjoyed by the cagers (biker slang for people that drive cars, trucks, and vans) so the Qualified Two-Wheeled Plug-In Electric Drive Motor Vehicle Tax Credit (aka E-motorcycle Federal Tax Credit) that originally expired on December 31, 2017 was retroactively extended through December 31, 2020 by the SECURE Act that was signed into law by President Trump late on Friday December 20, 2019.
The credit is available for the purchase of a “new” qualified two-wheeled plug-in electric drive vehicle that draws propulsion using a traction battery that has at least 2.5 kilowatt hours (kWh) of capacity, uses an eternal source of energy to recharge the battery, has a gross vehicle weight rating of up to 14,000 pounds, is manufactured primarily for use on public roadways and can drive at least 45 miles per hour.
Reported on IRS form 8936, the credit is for 10% of the cost of the qualified vehicle up to $2,500. Generally, you can rely on the manufacturer’s (or, in the case of a foreign manufacturer, its domestic distributor’s) certification to the IRS that a specific make, model and model year qualifies for the credit and the amount of the credit for which it qualifies. The manufacturer or domestic distributor should be able to provide you with a copy of the IRS letter acknowledging the certification of the vehicle. As a bonus, an additional tax credit was approved which covers electric motorcycle chargers with a 30% tax credit up to $1,000. So ride on, save some money, be safe and watch out for those cagers!
For any questions regarding vehicle tax credits, or other tax and accounting issues, please don’t hesitate to contact your Henry+Horne tax professional.
Dale F. Jensen, CPA