PwC | Regulations on Clean Vehicle Tax Credits are Finalized

The IRS and Treasury on May 6 published final regulations on tax credits under Section 30D for new clean vehicles and under Section 25E for previously owned clean vehicles.

The final regulations apply on various dates that conform to either issuance of the proposed regulations or statutory provisions. Accordingly, the Section 25E final regulations generally apply to tax years ending after October 10, 2023; the Section 30D final regulations generally apply to tax years ending after December 4, 2023; the rules regarding credit transfers apply to clean vehicles placed in service after December 31, 2023, in tax years ending after December 31, 2023; and the rules relating to excluded foreign entities apply to vehicles placed in service after December 31, 2023.

The Department of Energy concurrently published final rules on the definition of “foreign entities of concern,” which relates to Section 30D.

Why is it relevant? 

The final regulations include rules that had been addressed in three separately issued sets of proposed regulations: general substantive rules on the Section 30D credit; general substantive rules on Section 25E, and registration and reporting requirements and transfers under Sections 30D and 25E; and excluded foreign entities under Section 30D. The final regulations are a comprehensive consolidation of the rules for these credits.

Action to consider:

The final regulations will be discussed in further detail in PwC Insights in the coming days.

For more (upcoming) information, please visit PwC Tax Services insights page here.

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