Qualified Plug-in Electric Drive Motor Vehicles (IRC 30D)

Section 30D originally was enacted in the Energy Improvement and Extension Act of 2008. The American Recovery and Reinvestment Act of 2009 amended section 30D effective for vehicles acquired after December 31, 2009. For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law. The list of qualified vehicles provided below applies only to vehicles acquired by December 31, 2009.

Notice 2009-54 provides procedures that a vehicle manufacturer may use if it chooses to certify that a vehicle meets certain requirements that must be satisfied to claim the new Qualified Plug-in Electric Drive Motor Vehicle Credit and the amount of the credit allowable with respect to that vehicle. Notice 2009-54 applies to vehicles acquired by December 31, 2009.

Notice 2009-89 applies to vehicles acquired subsequent to 12-31-2009 and provides procedures that a vehicle manufacturer may use if it chooses to certify that a vehicle meets certain requirements that must be satisfied to claim the Qualified Plug-in Electric Drive Motor Vehicle Credit and the amount of the credit allowable with respect to that vehicle

Plug-in Electric Vehicles (IRC 30)
Internal Revenue Code Section 30 provides a credit for qualified plug-in electric vehicles. The credit is equal to 10 percent of the cost of a qualified plug-in electric vehicle and is limited to $2,500. Qualified vehicles may include low-speed vehicles or vehicles that have two or three wheels.

Vehicles must be acquired after February 17, 2009, and before January 1, 2012. The vehicle must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must commence with the taxpayer and the vehicle must be used predominantly in the United States.

Notice 2009-58 provides procedures for a vehicle manufacturer to certify to the Internal Revenue Service that a vehicle of a particular make, model, and model year meets the requirements that must be satisfied to claim the new plug-in electric vehicle credit under § 30.

Generally, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed or 2 years from the time the tax was paid, whichever period expires later. However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended for 1 year beginning on the date of the determination. The extension applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination

Example.You retired in 2004 and receive a pension based on your years of service. On August 6, 2009, you receive a determination of service-connected disability retroactive to 2004. Generally, you could claim a refund for the taxes paid on your pension for 2006, 2007, and 2008. However, under the special limitation period, you can also file a claim for 2005 as long as you file the claim by August 5, 2010. You cannot file a claim for 2004 because that tax year began on January 1, 2004, which is more than 5 years before date of the determination.

Under the new “Worker, Homeownership and Business Assistance Act of 2009,”  you must complete the purchase of the home before May 1, 2010. If you secure a binding contract before May 1, you actually have until June 30, 2010 to finalize the sale. Best of all, you don’t have to wait until you file your 2010 tax return to reap the rewards. You can claim the credit on your 2009 return — even if you buy the home in 2010. Taypayers who claim the first-time homebuyer credit on their 2009 returns will not be able to file electronically.

The new law includes the following changes effective as of Nov. 6, 2009 (the date of enactment).

• The deadline for the credit is extended from Dec. 1, 2009 to May 1, 2010. No further extension is expected.
• The credit is available to more taxpayers. Previously, it was limited to “first-time homebuyers” who did not own a principal residence for three years prior to purchasing a home. For purchases after Nov. 6, 2009, you may qualify for a maximum $6,500 credit if you’ve owned and used a home as your principal residence for any five consecutive years during the last eight years. The replacement home doesn’t have to cost more than the old one.
• The phase-out ranges are increased. The new phase-out ranges are between $125,000 and $145,000 of MAGI for unmarried filers, and $225,000 and $245,000 for joint filers.
• The price of the home is capped at $800,000 for all purchases after Nov. 6, 2009. No credit is allowed for homes priced above this threshold.
• The credit isn’t available for a home purchased from your spouse or your spouse’s relatives. This extends the rule denying the credit for purchases from your own lineal ancestors or descendants.
• To curb abuses, homebuyers must provide proof of purchase (i.e., an HUD-1form). The homebuyer (or spouse) must be at least 18 years and can’t be claimed by someone else as a dependent.

The revamped homebuyer credit is available to a much wider group of taxpayers. Call our office to determine whether you or another family member is eligible. We can also answer any additional questions relating to the new homebuyer credit that you might have.

Inventory – Manufacturing Tax Tips
How do I value my inventory?

Excise Taxes – Manufacturing Tax Tips
Manufacturing Companies may be liable for Federal excise taxes or due a credit or refund.

Research and Development – Manufacturing Tax Tips
Can you deduct R&D expenditures as a current business expense?

The expenditures of research and development (“R&D”) are generally capital expenses. However, you can choose to deduct these expenditures as current business expenses.

You may use one of the two following methods of accounting for R&D expenditures:

• You may deduct your R&D expenditures in the tax year, in which you paid or incurred,
  or
• You may amortize such expenditures over a period of not less than 60 months

You must charge to a capital account any R&D expenditures that you do not deduct currently, nor defer and amortize.

You may claim the R&D credit against tax for certain qualified R&D expenditures, and combine the credit as one of the components of the general business credit. The R&D credit is a nonrefundable tax credit.

For detail information of R&D expenditures, please select from the following topics:

Current-year Deduction of R&D Expenditures

Amortization of R&D Expenditures