Commercial Tax Credit Experiences? How-To? - Self Employed S-Corps/LLC's etc

[VAF84]

A lot of folks being blind-sided with the lack of qualification for the $7,500 EV tax credit on the CT. There's a subset of us here that have S-Corp's, and LLC's. I've yet to attempt going the commercial tax credit route using my S-corp, but wondering if anyone here has done it and how they went about it.

The IRS shows the paperwork side, but I'm more curious about payment, financing, and the title process. Also, whether there was anything that wasn't clear in the process until you went through it.

I don't want to turn the thread into a focus on the CT, but if anyone knows whether the CT still qualifies for the commercial credit that would be helpful.

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[elonmu5k]

Do you need to register it under your LLC name? Or can you register it under your personal name, and get commercial auto insurance, wrap it, and use it for business purposes to qualify for the credit?

 

[VAF84]

Do you need to register it under your LLC name? Or can you register it under your personal name, and get commercial auto insurance, wrap it, and use it for business purposes to qualify for the credit?

Hopefully someone can help us get those questions answered.

 

[VAF84]

Some resources with answers so far:

https://www.physicianfinancialservi...le-Tax-Credits-for-Business-Owners.c10149.htm

In particular, this part stands out:

Commercial clean vehicle credit

A general business tax credit of up to $7,500 ($40,000 for heavy vehicles weighing 14,000 or more pounds) is available for the purchase of a qualified commercial clean vehicle, including some types of “mobile machinery.”

The credit is equal to the lesser of (a) 15% of the tax basis (generally, the purchase price) of the vehicle (30% if the vehicle is not powered by a gasoline or diesel internal combustion engine), or (b) the incremental cost of the vehicle (the excess of the purchase price of the clean vehicle over the price of a comparable vehicle that is powered solely by a gasoline or diesel internal combustion engine).

For some business owners, this credit may be easier to take advantage of than the new clean vehicle credit, because it’s not subject to the income limits or the vehicle pricing, component, and final assembly requirements.

This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek guidance from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2023 Broadridge Financial Solutions, Inc.

https://www.irs.gov/newsroom/topic-...out-qualified-commercial-clean-vehicle-credit

https://uscode.house.gov/view.xhtml?req=(title:26 section:30D edition:prelim)

Based on the above info, it seems as if the CT would qualify for the commercial tax credit w/o concern for MSRP or materials used. Now just need someone t chime in who's actually done this.

 

[igs]

Do you need to register it under your LLC name?

Yes.

 

[jookyone]

Have you tried just a section 179 tax credit for vehicles based on weight?

 

[Johnelrod12]

Will be using our LLC to order as soon as we get the invite for Non FS. Placed my $100 on May 2nd of 2020. Will keep you updated.

 

[VAF84]

Have you tried just a section 179 tax credit for vehicles based on weight?

Have not, but I'll look into it.

Will be using our LLC to order as soon as we get the invite for Non FS. Placed my $100 on May 2nd of 2020. Will keep you updated.

Thanks!

I got a reply today from my accountant requesting I give him a few days to research since they have a lot of tax filing's due by the 15th. I hope to find out an official word around that time (TX resident). He does tax for some big fish, I'm probably one of his smaller clients, so I'm hopeful to get some good advice.

 

[elonmu5k]

I will be picking it up next week registering it under my business name. My accountant confirmed it will qualify, but I have to change my single member LLC to a multi member by adding my wife.

 

[TrittMD]

There is a distinct difference between Section 179/Bonus depreciation and the Commercial Clean Credit. You all definitely need to talk with a CPA before banking on these.

 

[somerandomguy]

Have not, but I'll look into it.



Thanks!

I got a reply today from my accountant requesting I give him a few days to research since they have a lot of tax filing's due by the 15th. I hope to find out an official word around that time (TX resident). He does tax for some big fish, I'm probably one of his smaller clients, so I'm hopeful to get some good advice.

went digging through the forum and was curious if you heard any guidance on this, or possible sec 179, bonus dep, etc..?

 

[VAF84]

went digging through the forum and was curious if you heard any guidance on this, or possible sec 179, bonus dep, etc..?

After pretty extensive research I went with the Commercial Clean Vehicle Credit. There is a little risk here because I didn't get the credit at the point of service, I have to file it with my taxes so I hope it goes smoothly.

Key Points:

• Tax credit is taken via a form you file with your business taxes.
• You need to have enough in tax liability to be offset by the credit. In other words if you owe $3k in biz taxes, you get a $3k credit instead of the full $7,500. Others have chimed in and said the remainder can be picked up over time, I don't know, consult a CPA.
• Credit is associated with the VIN, so technically you could use it on a used vehicle. However, if the prior owner bought the car under a business name, that person could potential take the credit at any time so you run the risk of being unable to take the credit for yourself.
• The car must be titled under the business name.
• No MSRP limit. I purchased the Sierra EV with $100k MSRP, $88k sales price and will use it there.
• No income limits

Some folks chime in about depreciation and all that. I have no clue. In the past I owned the vehicle under my name and deducted mileage as business expense. This is my first time titling the vehicle under my company. My accountant encouraged it (I don't know why he waited nearly 10 years to tell me this was a good thing), so I'll let him deal with that. I'm just happy to get a $7,500 discount, and happy to continue deducting miles for business. Anything else is bonus.

 

[M0unt41nm4n]

After pretty extensive research I went with the Commercial Clean Vehicle Credit. There is a little risk here because I didn't get the credit at the point of service, I have to file it with my taxes so I hope it goes smoothly.

Key Points:

• Tax credit is taken via a form you file with your business taxes.
• You need to have enough in tax liability to be offset by the credit. In other words if you owe $3k in biz taxes, you get a $3k credit instead of the full $7,500. Others have chimed in and said the remainder can be picked up over time, I don't know, consult a CPA.
• Credit is associated with the VIN, so technically you could use it on a used vehicle. However, if the prior owner bought the car under a business name, that person could potential take the credit at any time so you run the risk of being unable to take the credit for yourself.
• The car must be titled under the business name.
• No MSRP limit. I purchased the Sierra EV with $100k MSRP, $88k sales price and will use it there.
• No income limits

Some folks chime in about depreciation and all that. I have no clue. In the past I owned the vehicle under my name and deducted mileage as business expense. This is my first time titling the vehicle under my company. My accountant encouraged it (I don't know why he waited nearly 10 years to tell me this was a good thing), so I'll let him deal with that. I'm just happy to get a $7,500 discount, and happy to continue deducting miles for business. Anything else is bonus.

Yes. I am doing this. Purchased it in my business’ name. Am filing the commercial Clean Credit for 7,500.00. I’m an s-corp so the credit ends up a pass through. Most folks who make money in thier business will get the credit on pass through.

Yes, you can 179 the vehicle. I don’t remember what my accountant said but you can knock off (expense) 60-80% off via 179 of that vehicle being income taxable since it’s a big truck. Since these things depreciate like crazy, you won’t get hit too badly on recapture when you sell it. That’s the good thing about owning a highly depreciating EV. Little tax, drive the shit out of it, and depreciation recapture is tiny. As a business expense, these are the best,

 

[Hunter71294]

I was told by my accountant that you don’t need it registered in your business name if you have a single filer LLC. Has anyone else heard this?

 

[VAF84]

I was told by my accountant that you don’t need it registered in your business name if you have a single filer LLC. Has anyone else heard this?

Sorry, can't comment on that one. Someone else will have to chime in.

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