N-2023-9: Section 45W Commercial Clean Vehicles and Incremental Cost for 2023

Notice 2023-9 informs taxpayers that based on analysis by the Department of Energy of representative qualified commercial clean vehicles and comparable internal combustion engine vehicles, the Department of the Treasury and the Internal Revenue Service (IRS) have reviewed the incremental cost for all street vehicles in calendar year 2023. This analysis shows that the incremental cost of all street vehicles (other than in the case of compact car PHEVs) that have a gross vehicle weight rating of less than 14,000 pounds will be greater than $7,500 in calendar year 2023. Accordingly, the incremental cost will not limit the available credit amount under ? 45W for street vehicles (other than compact car PHEVs) that have a gross vehicle weight rating of less than 14,000 pounds and are placed in service in calendar year 2023.?

For compact car PHEVs for which the incremental cost was calculated to be less than $7,500, the Treasury Department and the IRS will accept for vehicles placed in service during calendar year 2023 a taxpayer?s use of the incremental cost published by the DOE in calculating the ? 45W credit amount.? In addition, this analysis provides an incremental cost for several different classes of street vehicles with a gross vehicle weight rating of 14,000 pounds or more in calendar year 2023. The IRS will accept a taxpayer?s reliance on the incremental cost published by the Department of Energy for the appropriate class of street vehicle.

Notice 2023-9 will be in IRB:?2023-3, dated January 17, 2023.

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