Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

New vehicles that qualify for a tax credit

IRC 30D(a) offers a credit to the buyer of an eligible plug-in electric drive motor vehicle. According to the IRS website, the additional models of Audi, MINI and Toyota Prius now qualify for the plug-in electric drive motor vehicle tax credit. The amount of the credit is $2,500 for allowed vehicles purchased after December 31, 2009, in addition to an amount that does not surpass $5,000 regarding battery capacity. The credit is reported on Form 8936 of the induvial tax return, known as the Qualified Plug-in Electric Drive Motor Vehicle Credit.

Don’t miss: Customized reports and analysis

The highest eligible tax credit amount is $7,500. However, the tax credit gradually lessens over six quarters that starts when a manufacturer has sold 200,000 vehicles minimum of that qualified vehicle in the U.S. To find out more about the full credit amount and the phase out period, visit the official U.S. government source for fuel economy information.

A list of eligible vehicles can be found on the IRS website. Any vehicle found on this list qualifies for the credit and the taxpayer can declare that on Form 8936 on their individual tax return.

The specific models regarding the new additions of the Audi, MINI, and Toyota Prius and their maximum eligible credit amounts are as follows.

  • 2020 Audi e-tron Sportback ($7,500)
  • 2020 Audi A8L OHEV & AudiQ5 PHEV ($6,712)
  • 2020 MINI Cooper S E Hardtop 2 door & MINI Cooper S E Hardtop ($7,500)
  • 2020-2021 MINI Cooper S E Countryman ALL4s ($5,002)
  • 2021 Toyota RAV4 Prime Plug-in Hybrid ($7,500)
  • 2020-2021 Prius Prime Plug-in Hybrid ($4,502)

For more information, visit the IRS website. (See link attached above).

For any questions regarding vehicle tax credits, or other tax and accounting issues, please don’t hesitate to contact your Henry+Horne tax professional.

Cierra Tate

Get in on the conversation.

Unfortunately, we cannot give free advice to non-clients by email, comment response, or phone call. Thank you! Read our disclaimer.