Treasury and IRS Announce Opening of EV Tax Credits

Questions remain regarding country of assembly eligibility.

The Department of the Treasury and the Internal Revenue Service released additional information regarding tax benefits on clean vehicle provisions under the Inflation Reduction Action. The Treasury Department stated that consumers leasing new electric vehicles can qualify for commercial clean vehicle tax credits as of January 1. The statement has brought forward questions about electric vehicle tax policy in the United States.

There is a difference in legal definition between consumer tax credits and commercial tax credits. The Inflation Reduction Act passed in August ended consumer tax credits for EVs assembled outside the United States, creating tensions with manufacturers in South Korea, Japan, and Europe. However, the Treasury included commercial tax credits, which do not have those restrictions, in this latest round of EV tax credits, reopening up funding for individual purchases of both domestic and foreign EVs.

Senator Joe Manchin, the chairman of the Senate’s energy panel, said the Treasury is rewarding “companies looking for loopholes.” He said he would seek legislation to address this issue.

As the Lord Leads, Pray with Us…

  • For Secretary Janet Yellen to be led by God as she oversees the Treasury Department.
  • For Acting Commissioner Douglas O’Donnell as he heads the Internal Revenue Service.
  • For Secretary Jennifer Granholm to lead the Energy Department with prudence.

Sources: Treasury Department, Reuters


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