What vehicles qualify for the Alternative Motor Vehicle Credit?
To qualify for the Alternative Motor Vehicle Credit, the vehicle must qualify as one of the following:
- Advanced lean burn technology vehicle: This is a vehicle with an internal combustion engine that incorporates direct injection, is designed to operate primarily using more air than is necessary for completed combustion of the fuel, and that meets certain additional requirements.
- Qualified hybrid vehicle: This is a vehicle that draws propulsion energy from onboard sources of stored energy that are both an internal combustion or heat engine using consumable fuel and a rechargeable energy storage system, and that meets certain additional requirements.
- Qualified alternative fuel vehicle: This is a vehicle fueled solely by compressed natural gas, liquefied natural gas, hydrogen, any liquid that is at least 85% methanol, or a mixture of one of these fuels and a petroleum-based fuel, and that meets certain additional requirements.
- Qualified fuel cell vehicle: This is a vehicle propelled by power derived from one or more cells that convert chemical energy directly into electricity by combining oxygen with hydrogen fuel, and that meets certain additional requirements.
- Qualified plug in electric drive motor vehicle: This is a vehicle that was converted before 2012 to be propelled to a significant extent by an electric motor that draws electricity from certain batteries capable of being recharged from an external source of electricity and that meets certain additional requirements.
Generally, for a qualified alternative fuel vehicle, an advanced lean burn technology vehicle, a qualified hybrid vehicle, a qualified fuel cell vehicle, or a qualified plug in electric drive motor vehicle, you can rely on the manufacturer’s (or, in the case of a foreign manufacturer, its domestic distributor’s) certification that a specific make, model, and model year vehicle qualifies for the credit and the maximum amount of the credit for which it qualifies.
If, however, the IRS publishes an announcement that the certification for any specific make, model, and model year vehicle has been withdrawn, you cannot rely on the certification for such a vehicle purchased after the date of publication of the withdrawal announcement.
If you purchased a vehicle and its certification was withdrawn on or after the date of purchase, you can rely on such certification even if you had not placed the vehicle in service or claimed the credit by the date the withdrawal announcement was published by the IRS. The IRS will not attempt to collect any understatement of tax liability attributable to reliance on the certification as long as you purchased the vehicle on or before the date the IRS published the withdrawal announcement.
For more information, please review the instructions for Form 8910.
Note: The alternative motor vehicle credit has expired for the following vehicles purchased after 2010: Advanced lean burn technology vehicles, qualified hybrid vehicles weighing 8,500 pounds or less, qualified alternative fuel vehicles. However, if you purchased one of these vehicles prior to 2011, but placed that vehicle in service during 2011, you may still take the credit for 2011.