I have not gotten a clear answer after looking through a few threads. I have reached out to my accountant but have not heard anything back yet from him as he is busy with the September filings.
Can a business claim the $7500 tax credit and get accelerated depreciation? If so, probably only on the Model X due to weight.
Also, how does that work, does he file it under the business on the 1040 or on the 1120?
Please answer if you have experience with this already.
I have no ideas about business tax but logically:
1. Commercial Clean Vehicle Credit is an incentive for you to buy. After you bought it, that property whether ICE or EV should be treated just like before. If you've been doing "depreciation" (which I have no idea) before for your gasoline Hummer before, it's no different with your EV. The cost basis calculation is no difference with other properties that instead of paying the full price, you got a net cheaper price due to the EV credits so you can't claim that you paid a full price whether it's an ICE or an EV.
Just because the car is an EV, it doesn't have to be complicated. Its money, value, basis, and calculation are just a car for your tax calculating purpose.
2.
The weight is for the amount of money. Below 14,000 lbs = $7,500. Above 14,000 lbs = $40,000.
3. I have no idea what form a business files. If you have been filing whatever form before for Business Income Tax, you should continue to use the very same form without switching to Personal Income Tax 1040.
4.
This particular Commercial Clean Vehicle Credit law is new for 2023, so in addition to the usual form that you've been filing for Business Income Tax, the IRS will create a new form for you to enter your VIN of your EV vehicles and calculate the eligible amount then attach that to the main Business Income Tax form that you have been using for years. So it's an additional form and not a switch to Personal Income Tax form 1040.
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How to Claim the Credit
We’re finalizing a form for you to claim the credit. Please check back for updates.
You will need to provide your vehicle's VIN along with the amount of the credit.
The depreciable basis of the vehicle is reduced by the amount of the commercial clean vehicle credit you receive."
Remember, I've always been a hired worker and never knew anything about business filing but there's no reason that things got complicated just because it's an EV.
Just file the same way as you did before and attach the brand new 2023 Commercial Clean Vehicle Credit form to make sure you don't duplicate 1 car into 2 credits by writing down the unique VIN.
Good luck!
