§30D — Clean vehicle credit
Statute Text — 26 U.S.C. §30D
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each new clean vehicle placed in service by the taxpayer during the taxable year.
The amount determined under this subsection with respect to any new clean vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.
In the case of a vehicle with respect to which the requirement described in subsection (e)(1)(A) is satisfied, the amount determined under this paragraph is $3,750.
In the case of a vehicle with respect to which the requirement described in subsection (e)(2)(A) is satisfied, the amount determined under this paragraph is $3,750.
So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
For purposes of this section—
The term “new clean vehicle” means a motor vehicle—
the original use of which commences with the taxpayer,
which is acquired for use or lease by the taxpayer and not for resale,
which is made by a qualified manufacturer,
which is treated as a motor vehicle for purposes of title II of the Clean Air Act,
which has a gross vehicle weight rating of less than 14,000 pounds,
which is propelled to a significant extent by an electric motor which draws electricity from a battery which—
has a capacity of not less than 7 kilowatt hours, and
is capable of being recharged from an external source of electricity,
the final assembly of which occurs within North America, and
for which the person who sells any vehicle to the taxpayer furnishes a report to the taxpayer and to the Secretary, at such time and in such manner as the Secretary shall provide, containing—
the name and taxpayer identification number of the taxpayer,
the vehicle identification number of the vehicle, unless, in accordance with any applicable rules promulgated by the Secretary of Transportation, the vehicle is not assigned such a number,
the battery capacity of the vehicle,
verification that original use of the vehicle commences with the taxpayer,
the maximum credit under this section allowable to the taxpayer with respect to the vehicle, and
in the case of a taxpayer who makes an election under subsection (g)(1), any amount described in subsection (g)(2)(C) which has been provided to such taxpayer.
The term “motor vehicle” means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.
The term “qualified manufacturer” means any manufacturer (within the meaning of the regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.)) which enters into a written agreement with the Secretary under which such manufacturer agrees to make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) providing vehicle identification numbers and such other information related to each vehicle manufactured by such manufacturer as the Secretary may require.
The term “capacity” means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.
For purposes of paragraph (1)(G), the term “final assembly” means the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle.
For purposes of this section, the term “new clean vehicle” shall include any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) which meets the requirements under subparagraphs (G) and (H) of paragraph (1).
For purposes of this section, the term “new clean vehicle” shall not include—
any vehicle placed in service after
December 31, 2024
, with respect to which any of the applicable critical minerals contained in the battery of such vehicle (as described in subsection (e)(1)(A)) were extracted, processed, or recycled by a foreign entity of concern (as defined in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (
42 U.S.C. 18741(a)(5)
)), or
any vehicle placed in service after
December 31, 2023
, with respect to which any of the components contained in the battery of such vehicle (as described in subsection (e)(2)(A)) were manufactured or assembled by a foreign entity of concern (as so defined).
The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the applicable critical minerals (as defined in section 45X(c)(6)) contained in such battery that were—
extracted or processed—
in the United States, or
in any country with which the United States has a free trade agreement in effect, or
recycled in North America,
is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).
For purposes of subparagraph (A), the applicable percentage shall be—
in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before
January 1, 2024
, 40 percent,
in the case of a vehicle placed in service during calendar year 2024, 50 percent,
in the case of a vehicle placed in service during calendar year 2025, 60 percent, and
in the case of a vehicle placed in service during calendar year 2026, 70 percent.
The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the components contained in such battery that were manufactured or assembled in North America is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).
For purposes of subparagraph (A), the applicable percentage shall be—
in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before
January 1, 2024
, 50 percent,
in the case of a vehicle placed in service during calendar year 2024 or 2025, 60 percent, and
in the case of a vehicle placed in service during calendar year 2026, 70 percent.
The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.
Not later than December 31, 2022, the Secretary shall issue proposed guidance with respect to the requirements under this subsection.
For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (c)).
The amount of any deduction or other credit allowable under this chapter for a vehicle for which a credit is allowable under subsection (a) shall be reduced by the amount of credit allowed under such subsection for such vehicle (determined without regard to subsection (c)).
No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1).
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.
No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.
A vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with—
the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and
the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code.
In the case of any vehicle, the credit described in subsection (a) shall only be allowed once with respect to such vehicle, as determined based upon the vehicle identification number of such vehicle, including any vehicle with respect to which the taxpayer elects the application of subsection (g).
No credit shall be allowed under this section with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.
No credit shall be allowed under subsection (a) for any taxable year if—
the lesser of—
the modified adjusted gross income of the taxpayer for such taxable year, or
the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds
the threshold amount.
For purposes of subparagraph (A)(ii), the threshold amount shall be—
in the case of a joint return or a surviving spouse (as defined in section 2(a)), $300,000,
in the case of a head of household (as defined in section 2(b)), $225,000, and
in the case of a taxpayer not described in clause (i) or (ii), $150,000.
For purposes of this paragraph, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.
No credit shall be allowed under subsection (a) for a vehicle with a manufacturer’s suggested retail price in excess of the applicable limitation.
For purposes of subparagraph (A), the applicable limitation for each vehicle classification is as follows:
In the case of a van, $80,000.
In the case of a sport utility vehicle, $80,000.
In the case of a pickup truck, $80,000.
In the case of any other vehicle, $55,000.
For purposes of this paragraph, the Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles.
Subject to such regulations or other guidance as the Secretary determines necessary, if the taxpayer who acquires a new clean vehicle elects the application of this subsection with respect to such vehicle, the credit which would (but for this subsection) be allowed to such taxpayer with respect to such vehicle shall be allowed to the eligible entity specified in such election (and not to such taxpayer).
For purposes of this subsection, the term “eligible entity” means, with respect to the vehicle for which the credit is allowed under subsection (a), the dealer which sold such vehicle to the taxpayer and has—
subject to paragraph (4), registered with the Secretary for purposes of this paragraph, at such time, and in such form and manner, as the Secretary may prescribe,
prior to the election described in paragraph (1) and not later than at the time of such sale, disclosed to the taxpayer purchasing such vehicle—
the manufacturer’s suggested retail price,
the value of the credit allowed and any other incentive available for the purchase of such vehicle, and
the amount provided by the dealer to such taxpayer as a condition of the election described in paragraph (1),
not later than at the time of such sale, made payment to such taxpayer (whether in cash or in the form of a partial payment or down payment for the purchase of such vehicle) in an amount equal to the credit otherwise allowable to such taxpayer, and
with respect to any incentive otherwise available for the purchase of a vehicle for which a credit is allowed under this section, including any incentive in the form of a rebate or discount provided by the dealer or manufacturer, ensured that—
the availability or use of such incentive shall not limit the ability of a taxpayer to make an election described in paragraph (1), and
such election shall not limit the value or use of such incentive.
An election described in paragraph (1) shall be made by the taxpayer not later than the date on which the vehicle for which the credit is allowed under subsection (a) is purchased.
Upon determination by the Secretary that a dealer has failed to comply with the requirements described in paragraph (2), the Secretary may revoke the registration (as described in subparagraph (A) of such paragraph) of such dealer.
With respect to any payment described in paragraph (2)(C), such payment—
shall not be includible in the gross income of the taxpayer, and
with respect to the dealer, shall not be deductible under this title.
In the case of any election under paragraph (1) with respect to any vehicle—
the requirements of paragraphs (1) and (2) of subsection (f) shall apply to the taxpayer who acquired the vehicle in the same manner as if the credit determined under this section with respect to such vehicle were allowed to such taxpayer,
paragraph (6) of such subsection shall not apply, and
the requirement of paragraph (9) of such subsection (f) shall be treated as satisfied if the eligible entity provides the vehicle identification number of such vehicle to the Secretary in such manner as the Secretary may provide.
The Secretary shall establish a program to make advance payments to any eligible entity in an amount equal to the cumulative amount of the credits allowed under subsection (a) with respect to any vehicles sold by such entity for which an election described in paragraph (1) has been made.
Rules similar to the rules of section 6417(d)(6) shall apply for purposes of this paragraph.
For purposes of section 1324 of title 31, United States Code, the payments under subparagraph (A) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
For purposes of this subsection, the term “dealer” means a person licensed by a State, the District of Columbia, the Commonwealth of Puerto Rico, any other territory or possession of the United States, an Indian tribal government, or any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m)) 11 So in original. Another closing parenthesis probably should appear. to engage in the sale of vehicles.
For purposes of this subsection, the term “Indian tribal government” means the recognized governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, community, component band, or component reservation, individually identified (including parenthetically) in the list published most recently as of the date of enactment of this subsection pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5131).
In the case of any taxpayer who has made an election described in paragraph (1) with respect to a new clean vehicle and received a payment described in paragraph (2)(C) from an eligible entity, if the credit under subsection (a) would otherwise (but for this subsection) not be allowable to such taxpayer pursuant to the application of subsection (f)(10), the tax imposed on such taxpayer under this chapter for the taxable year in which such vehicle was placed in service shall be increased by the amount of the payment received by such taxpayer.
No credit shall be allowed under this section with respect to any vehicle acquired after September 30, 2025.
Treasury Regulations
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Treas. Reg. §1.30D-0Table of contents
This section lists the captions contained in §§ 1.30D-1 through 1.30D-6.
(a) In general.
(b) Application with other credits.
(1) Business credit treated as part of general business credit.
(2) Apportionment of section 30D credit.
(3) Personal credit limited based on tax liability.
(c) Severability.
(d) Applicability date.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Applicable critical mineral.
(i) In general.
(ii) Example: Form of applicable critical mineral.
(3) Assembly.
(4) Associated constituent material.
(5) Battery.
(6) Battery cell.
(7) Battery cell production facility.
(8) Battery component.
(9) Battery materials.
(10) Clean vehicle battery.
(11) Compliant-battery ledger.
(12) Constituent materials.
(13) Country with which the United States has a free trade agreement in effect.
(i) In general.
(ii) Free trade agreements in effect.
(iii) Updates.
(14) Credit transfer election.
(15) Dealer.
(16) Dealer tax compliance.
(17) Depreciable vehicle.
(18) Electing taxpayer.
(19) Eligible entity.
(20) Excessive payment.
(21) Extraction.
(22) FEOC-compliant.
(23) Final assembly.
(24) Foreign entity of concern.
(25) Impracticable-to-trace battery materials.
(i) In general.
(ii) Identified impracticable-to-trace battery materials.
(26) Incentive.
(27) Incremental value.
(28) Manufacturer.
(i) In general.
(ii) Modification of a new motor vehicle.
(29) Manufacturer's suggested retail price.
(i) In general.
(ii) Retail price.
(iii) Retail delivered price.
(30) Manufacturing.
(31) Modified adjusted gross income.
(i) Individuals.
(ii) Estates and trusts.
(32) New clean vehicle.
(33) New qualified fuel cell motor vehicle.
(34) North America.
(35) North American battery component.
(36) Placed in service.
(37) Processing.
(38) Procurement chain.
(39) Qualifying battery component content.
(40) Qualifying critical mineral.
(41) Qualifying critical mineral content.
(42) Qualified manufacturer.
(43) Recycling.
(i) In general.
(ii) Example: Recycling of applicable critical mineral.
(44) Registered dealer.
(45) Section 30D regulations.
(46) Seller report.
(47) Time of sale.
(48) Total incremental value of battery components.
(49) Total incremental value of North American battery components.
(50) Total traced qualifying value.
(51) Total value of critical minerals.
(52) Total value of qualifying critical minerals.
(53) Traced qualifying value.
(54) Value.
(55) Value added.
(56) Vehicle classification.
(i) In general.
(ii) Van.
(iii) Sport utility vehicle.
(iv) Pickup truck.
(v) Other vehicle.
(c) Severability.
(d) Applicability date.
(a) Critical minerals requirement.
(1) In general.
(2) Applicable critical minerals percentage.
(i) In general.
(ii) Vehicles placed in service between April 18, 2023, and December 31, 2023.
(iii) Vehicles placed in service during calendar year 2024.
(iv) Vehicles placed in service during calendar year 2025.
(v) Vehicles placed in service during calendar year 2026.
(vi) Vehicles placed in service during calendar year 2027 and later.
(3) Determining qualifying critical mineral content.
(i) In general.
(ii) Separate determinations required for each procurement chain.
(iii) Time for determining value.
(iv) Application of qualifying critical mineral content to vehicles.
(4) Temporary safe harbor for determining qualifying critical mineral content for vehicles for which a qualified manufacturer submits a periodic written report on or after May 6, 2024 and before January 1, 2027.
(i) In general.
(ii) Separate determinations required for each procurement chain.
(iii) Time for determining value.
(iv) Application of qualifying critical mineral content to vehicles.
(v) Consistent determination required for all procurement chains.
(5) Rule for determining qualifying critical mineral content for vehicles for which a qualified manufacturer submitted a periodic written report before May 6, 2024.
(b) Battery components requirement.
(1) In general.
(2) Applicable battery components percentage.
(i) In general.
(ii) Vehicles placed in service between April 18, 2023, and December 31, 2023.
(iii) Vehicles placed in service during calendar year 2024 or 2025.
(iv) Vehicles placed in service during calendar year 2026.
(v) Vehicles placed in service during calendar year 2027.
(vi) Vehicles placed in service during calendar year 2028.
(vii) Vehicles placed in service in calendar year 2029 and later.
(3) Determining qualifying battery component content.
(i) In general.
(ii) Time for determining value.
(iii) Application of qualifying battery component content to vehicles.
(iv) End point for determination.
(c) Definitions.
(1) Certain terms relevant to the critical minerals requirement.
(i) Procurement chain.
(ii) Qualifying critical mineral.
(A) In general.
(B) Extracted or processed in the United States or in any country with which the United States has a free trade agreement in effect.
(C) Recycled in North America.
(iii) Qualifying critical mineral content.
(iv) Total traced qualifying value.
(v) Total value of critical minerals.
(vi) Total value of qualifying critical minerals.
(vii) Traced qualifying value.
(A) Extracted or processed in the United States or in any country with which the United States has a free trade agreement in effect.
(B) Recycled in North America.
(viii) Value added.
(2) Certain terms relevant to the battery components requirement.
(i) Incremental value.
(ii) North American battery component.
(iii) Qualifying battery component content.
(iv) Total incremental value of battery components.
(v) Total incremental value of North American battery components.
(d) Upfront review of critical minerals and battery components requirements.
(e) New qualified fuel cell motor vehicles.
(f) Examples.
(1) Example 1: Critical minerals requirement.
(i) Facts.
(ii) Analysis.
(2) Example 2: Critical minerals requirement temporary safe harbor.
(i) Facts.
(ii) Analysis.
(3) Example 3: Battery components requirement.
(i) Facts.
(ii) Analysis.
(g) Severability.
(h) Applicability date.
(1) In general.
(2) Upfront review and traced qualifying value.
(a) No double benefit.
(1) In general.
(2) Interaction between section 30D and section 25E credits.
(3) Interaction between section 30D and section 45W credits.
(b) Limitation based on modified adjusted gross income.
(1) In general.
(2) Threshold amount.
(3) Special rule for change in filing status.
(4) Application to estates and trusts.
(i) Estates and non-grantor trusts.
(ii) Grantor trusts.
(5) Application to passthrough entities.
(6) Other taxpayers.
(c) Credit may generally be claimed on only one tax return.
(1) In general.
(2) Exception for passthrough entities.
(3) Seller reporting.
(i) In general.
(ii) Passthrough entities.
(4) Example.
(d) Grantor trusts.
(e) Recapture rules.
(1) In general.
(i) Cancelled sale.
(ii) Vehicle return.
(iii) Resale.
(iv) Other vehicle returns and resales.
(2) Recapture rules in the case of a credit transfer election.
(3) Example: Demonstrator vehicle.
(f) Seller registration.
(g) Requirement to file return.
(h) Taxpayer reliance on manufacturer certifications and periodic written reports to the IRS.
(i) Severability.
(j) Applicability date.
(a) In general.
(b) Definitions.
(1) Advance payment program.
(2) Credit transfer election.
(3) Dealer.
(4) Dealer tax compliance.
(5) Electing taxpayer.
(6) Eligible entity.
(7) Incentive.
(8) Registered dealer.
(9) Sale price.
(10) Time of sale.
(c) Dealer registration.
(1) In general.
(2) Dealer tax compliance required.
(3) Suspension of registration.
(4) Revocation of registration.
(d) Credit transfer election by electing taxpayer.
(e) Federal income tax consequences of the credit transfer election.
(1) Tax consequences for electing taxpayer.
(2) Tax consequences for eligible entity.
(3) Form of payment from eligible entity to electing taxpayer.
(4) Additional requirements.
(5) Examples.
(i) Example 1: Electing taxpayer's regular tax liability less than amount of credit.
(A) Facts.
(B) Analysis.
(ii) Example 2: Non-cash payment by eligible entity to electing taxpayer.
(A) Facts.
(B) Analysis.
(iii) Example 3: Eligible entity is a partnership.
(A) Facts.
(B) Analysis.
(f) Advance payments received by eligible entities.
(1) In general.
(2) Requirements for a registered dealer to become an eligible entity.
(3) Suspension of registered dealer eligibility.
(4) Revocation of registered dealer eligibility.
(g) Increase in tax.
(1) Recapture if electing taxpayer exceeds modified adjusted gross income limitation.
(2) Excessive payments.
(i) In general.
(ii) Reasonable cause.
(iii) Excessive payment defined.
(iv) Special rule for cases in which the electing taxpayer's modified adjusted gross income exceeds the limitation.
(3) Examples.
(i) Example 1: Registered dealer is not an eligible entity.
(A) Facts.
(B) Analysis.
(ii) Example 2: Incorrect manufacturer certifications.
(A) Facts.
(B) Analysis.
(h) Return requirement.
(i) Two credit transfer elections per year.
(j) Severability.
(k) Applicability date.
(a) In general.
(b) Due diligence required.
(1) In general.
(2) Transition rule for impracticable-to-trace battery materials.
(c) FEOC compliance.
(1) In general.
(i) Step 1.
(ii) Step 2.
(iii) Step 3.
(2) FEOC-compliant batteries.
(3) FEOC-compliant battery cells.
(i) In general.
(ii) Allocation-based determination for applicable critical minerals and associated constituent materials of a battery cell.
(A) In general.
(B) Allocation limited to applicable critical minerals in the battery cell.
(C) Separate allocation required for each type of associated constituent material.
(1) In general.
(2) Example.
(D) Allocation within each product line of battery cells.
(E) Limitation on number of FEOC-compliant battery cells.
(iii) Transition rule for impracticable-to-trace battery materials.
(4) FEOC-compliant battery components and applicable critical minerals.
(i) In general.
(ii) Timing of determination of FEOC or FEOC-compliant status.
(iii) Example: Timing of FEOC compliance determination.
(5) Third-party manufacturers or suppliers.
(i) Due diligence required.
(ii) Provision of required information to qualified manufacturer.
(iii) Contractual obligations.
(iv) Additional requirements in case of multiple third-party manufacturers or suppliers.
(d) Compliant-battery ledger.
(1) In general.
(2) Determination of number of batteries.
(i) In general.
(ii) Upfront review.
(iii) Decrease or increase to compliant-battery ledger.
(3) Tracking FEOC-compliant batteries.
(4) Reconciliation of battery estimates.
(e) Rule for 2024.
(1) In general.
(2) Determination.
(f) Inaccurate attestations, certifications, or documentation.
(1) In general.
(2) Inadvertence.
(i) Inaccurate information may be cured by qualified manufacturer.
(ii) Consequences if errors not cured.
(3) Intentional disregard or fraud.
(i) All vehicles ineligible for credit.
(ii) Termination of written agreement.
(g) Rules inapplicable to new qualified fuel cell motor vehicles.
(h) Examples.
(1) Example 1: In general.
(i) Facts.
(ii) Analysis.
(2) Example 2: Rules for third-party suppliers.
(i) Facts.
(ii) Analysis.
(3) Example 3: Applicable critical minerals.
(i) Facts.
(ii) Analysis.
(4) Example 4: Comprehensive example.
(i) Facts.
(ii) Analysis.
(i) Severability.
(j) Applicability date.
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Treas. Reg. §1.30D-0(a)In general.
In general.
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Treas. Reg. §1.30D-0(b)Due diligence required.
Due diligence required.
(1) In general.
(2) Transition rule for impracticable-to-trace battery materials.
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Treas. Reg. §1.30D-0(c)FEOC compliance.
FEOC compliance.
(1) In general.
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Treas. Reg. §1.30D-0(d)Compliant-battery ledger.
Compliant-battery ledger.
(1) In general.
(2) Determination of number of batteries.
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Treas. Reg. §1.30D-0(e)Rule for 2024.
Rule for 2024.
(1) In general.
(2) Determination.
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Treas. Reg. §1.30D-0(f)Inaccurate attestations, certifications, or documentation.
Inaccurate attestations, certifications, or documentation.
(1) In general.
(2) Inadvertence.
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Treas. Reg. §1.30D-0(g)Rules inapplicable to new qualified fuel cell motor vehicles.
Rules inapplicable to new qualified fuel cell motor vehicles.
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Treas. Reg. §1.30D-0(h)Examples.
Examples.
(1) Example 1: In general.
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Treas. Reg. §1.30D-0(i)Severability.
Severability.
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Treas. Reg. §1.30D-0(j)Applicability date.
Applicability date.
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Treas. Reg. §1.30D-0(k)Applicability date.
Applicability date.
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Treas. Reg. §1.30D-0(v)Total incremental value of North American battery components.
Total incremental value of North American battery components.
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Treas. Reg. §1.30D-1Credit for new clean vehicles
(a) In general. Section 30D(a) of the Internal Revenue Code (Code) allows as a credit against the tax imposed by chapter 1 of the Code (chapter 1) for the taxable year of a taxpayer an amount equal to the sum of the credit amounts determined under section 30D(b) with respect to each new clean vehicle purchased by the taxpayer that the taxpayer places in service during the taxable year. This section provides generally applicable rules that apply for purposes of determining the credit under section 30D and the section 30D regulations (section 30D credit). Section 1.30D-2 provides definitions that apply for purposes of section 30D and the section 30D regulations. Section 1.30D-3 provides rules regarding the critical minerals and battery components requirements of section 30D(e). Section 1.30D-4 provides guidance regarding the limitations and special rules in section 30D(f) as well as other special rules with respect to the section 30D credit. Section 1.30D-5 provides rules for the credit transfer election and advance payment program and for recapture. Section 1.30D-6 provides rules regarding the foreign entities of concern (FEOC) restriction of section 30D(d)(7).
(b) Application with other credits—(1) Business credit treated as part of general business credit. Section 30D(c)(1) requires that so much of the section 30D credit that would be allowed under section 30D(a) for any taxable year (determined without regard to section 30D(c) and this paragraph (b)) that is attributable to a depreciable vehicle must be treated as a general business credit under section 38 of the Code that is listed in section 38(b)(30) for such taxable year (and not allowed under section 30D(a)). In the case of a depreciable vehicle the use of which is 50 percent or more business use in the taxable year such vehicle is placed in service, the section 30D credit that would be allowed under section 30D(a) for that taxable year (determined without regard to section 30D(c) and this paragraph (b)) that is attributable to such depreciable vehicle must be treated as a general business credit under section 38(b)(30) for such taxable year (and not allowed under section 30D(a)). See paragraph (b)(2) of this section for rules applicable in the case of a depreciable vehicle the use of which is less than 50 percent business use in the taxable year such vehicle is placed in service. See paragraph (b)(3) of this section for rules applicable to a section 30D credit allowed under section 30D(a) pursuant to section 30D(c)(2) or paragraph (b)(2)(ii) or (b)(3) of this section.
(2) Apportionment of section 30D credit. Unless the taxpayer has elected to transfer the credit pursuant to section 30D(g) and § 1.30D-5(d), in the case of a depreciable vehicle the business use of which is less than 50 percent of a taxpayer's total use of the vehicle for the taxable year in which the vehicle is placed in service, the taxpayer's section 30D credit for that taxable year with respect to that vehicle must be apportioned as follows:
(i) The portion of the section 30D credit corresponding to the percentage of the taxpayer's business use of the vehicle is treated as a general business credit under section 30D(c)(1) and paragraph (b)(1) of this section (and not allowed under section 30D(a) or paragraph (b)(3) of this section).
(ii) The portion of the section 30D credit corresponding to the percentage of the taxpayer's personal use of the vehicle is treated as a section 30D credit allowed under section 30D(a) pursuant to section 30D(c)(2) and paragraph (b)(3) of this section.
(3) Personal credit limited based on tax liability. Section 26 of the Code limits the aggregate amount of credits allowed to a taxpayer by subpart A of part IV of subchapter A of chapter 1 (subpart A) based on the taxpayer's tax liability. Under section 26(a), the aggregate amount of credits allowed to a taxpayer by subpart A cannot exceed the sum of the taxpayer's regular tax liability (as defined in section 26(b)) for the taxable year reduced by the foreign tax credit allowable under section 27 of the Code, and the alternative minimum tax imposed by section 55(a) of the Code for the taxable year. Section 30D(c)(2) provides that the section 30D credit allowed under section 30D(a) for any taxable year (determined after application of section 30D(c)(1) and paragraphs (b)(1) and (2) of this section) is treated as a credit allowable under subpart A for such taxable year, and the section 30D credit allowed under section 30D(a) is therefore subject to the limitation imposed by section 26.
(c) Severability. The provisions of this section are separate and severable from one another. If any provision of this section is stayed or determined to be invalid, it is the agencies' intention that the remaining provisions shall continue in effect.
(d) Applicability date. This section applies to taxable years ending after December 4, 2023.
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Treas. Reg. §1.30D-1(a)In general.
In general. Section 30D(a) of the Internal Revenue Code (Code) allows as a credit against the tax imposed by chapter 1 of the Code (chapter 1) for the taxable year of a taxpayer an amount equal to the sum of the credit amounts determined under section 30D(b) with respect to each new clean vehicle purchased by the taxpayer that the taxpayer places in service during the taxable year. This section provides generally applicable rules that apply for purposes of determining the credit under section 30D and the section 30D regulations (section 30D credit). Section 1.30D-2 provides definitions that apply for purposes of section 30D and the section 30D regulations. Section 1.30D-3 provides rules regarding the critical minerals and battery components requirements of section 30D(e). Section 1.30D-4 provides guidance regarding the limitations and special rules in section 30D(f) as well as other special rules with respect to the section 30D credit. Section 1.30D-5 provides rules for the credit transfer election and advance payment program and for recapture. Section 1.30D-6 provides rules regarding the foreign entities of concern (FEOC) restriction of section 30D(d)(7).
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Treas. Reg. §1.30D-1(b)Application with other credits—(1) Business credit treated as part of general business credit.
Application with other credits—(1) Business credit treated as part of general business credit. Section 30D(c)(1) requires that so much of the section 30D credit that would be allowed under section 30D(a) for any taxable year (determined without regard to section 30D(c) and this paragraph (b)) that is attributable to a depreciable vehicle must be treated as a general business credit under section 38 of the Code that is listed in section 38(b)(30) for such taxable year (and not allowed under section 30D(a)). In the case of a depreciable vehicle the use of which is 50 percent or more business use in the taxable year such vehicle is placed in service, the section 30D credit that would be allowed under section 30D(a) for that taxable year (determined without regard to section 30D(c) and this paragraph (b)) that is attributable to such depreciable vehicle must be treated as a general business credit under section 38(b)(30) for such taxable year (and not allowed under section 30D(a)). See paragraph (b)(2) of this section for rules applicable in the case of a depreciable vehicle the use of which is less than 50 percent business use in the taxable year such vehicle is placed in service. See paragraph (b)(3) of this section for rules applicable to a section 30D credit allowed under section 30D(a) pursuant to section 30D(c)(2) or paragraph (b)(2)(ii) or (b)(3) of this section.
(2) Apportionment of section 30D credit. Unless the taxpayer has elected to transfer the credit pursuant to section 30D(g) and § 1.30D-5(d), in the case of a depreciable vehicle the business use of which is less than 50 percent of a taxpayer's total use of the vehicle for the taxable year in which the vehicle is placed in service, the taxpayer's section 30D credit for that taxable year with respect to that vehicle must be apportioned as follows:
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Treas. Reg. §1.30D-1(c)Severability.
Severability. The provisions of this section are separate and severable from one another. If any provision of this section is stayed or determined to be invalid, it is the agencies' intention that the remaining provisions shall continue in effect.
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Treas. Reg. §1.30D-1(d)Applicability date.
Applicability date. This section applies to taxable years ending after December 4, 2023.
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Treas. Reg. §1.30D-1(i)The portion of the section 30D credit corresponding to the percentage of the taxpayer's business use of the vehicle is treated as a general business credit under section 30D(c)(1) and paragraph (b)(1) of this section (and not allowed under section 30D(a) or paragraph (b)(3) of this section).
The portion of the section 30D credit corresponding to the percentage of the taxpayer's business use of the vehicle is treated as a general business credit under section 30D(c)(1) and paragraph (b)(1) of this section (and not allowed under section 30D(a) or paragraph (b)(3) of this section).
(ii) The portion of the section 30D credit corresponding to the percentage of the taxpayer's personal use of the vehicle is treated as a section 30D credit allowed under section 30D(a) pursuant to section 30D(c)(2) and paragraph (b)(3) of this section.
(3) Personal credit limited based on tax liability. Section 26 of the Code limits the aggregate amount of credits allowed to a taxpayer by subpart A of part IV of subchapter A of chapter 1 (subpart A) based on the taxpayer's tax liability. Under section 26(a), the aggregate amount of credits allowed to a taxpayer by subpart A cannot exceed the sum of the taxpayer's regular tax liability (as defined in section 26(b)) for the taxable year reduced by the foreign tax credit allowable under section 27 of the Code, and the alternative minimum tax imposed by section 55(a) of the Code for the taxable year. Section 30D(c)(2) provides that the section 30D credit allowed under section 30D(a) for any taxable year (determined after application of section 30D(c)(1) and paragraphs (b)(1) and (2) of this section) is treated as a credit allowable under subpart A for such taxable year, and the section 30D credit allowed under section 30D(a) is therefore subject to the limitation imposed by section 26.
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Treas. Reg. §1.30D-2Definitions for purposes of section 30D
(a) In general. The definitions in this section apply for purposes of section 30D of the Internal Revenue Code (Code) and the section 30D regulations.
(b) Definitions—(1) Advance payment program. Advance payment program means advance payment program as defined in § 1.30D-5(b)(1).
(2) Applicable critical mineral—(i) In general. Applicable critical mineral means an applicable critical mineral as defined in section 45X(c)(6) of the Code. The requirements of §§ 1.30D-3(a) and 1.30D-6 with respect to an applicable critical mineral take into account each step of extraction, processing, or recycling through the step in which such mineral is processed or recycled into a constituent material, even if the mineral is not in a form listed in section 45X(c)(6) at every step of production. However, an applicable critical mineral is disregarded for purposes of the requirements of §§ 1.30D-3(a) and 1.30D-6 if it is fully consumed in the production of the constituent material or battery component and no longer remains in any form in the battery.
(ii) Example: Form of applicable critical mineral. Mineral Y is extracted and is intended to be incorporated into the battery of an electric vehicle. Mineral Y is not in a form listed in section 45X(c)(6) at the time of such extraction, but subsequently it is refined into an applicable critical mineral form listed in section 45X(c)(6). Both the extraction and processing are taken into account for purposes of the requirements of §§ 1.30D-3(a) and 1.30D-6.
(3) Assembly. Assembly, with respect to battery components, means the process of combining battery components into battery cells and battery modules.
(4) Associated constituent material. Associated constituent material, with respect to an applicable critical mineral, means a constituent material that has been processed or recycled from such mineral into the constituent material with which it is associated, even if that processing or recycling transformed such mineral into a form not listed in section 45X(c)(6).
(5) Battery. Battery, for purposes of a new clean vehicle, means a collection of one or more battery modules, each of which has two or more electrically configured battery cells in series or parallel, to create voltage or current. The term battery does not include items such as thermal management systems or other parts of a battery cell or module that do not directly contribute to the electrochemical storage of energy within the battery, such as battery cell cases, cans, or pouches.
(6) Battery cell. Battery cell means a combination of battery components (other than battery cells) capable of electrochemically storing energy from which the electric motor of a new clean vehicle draws electricity.
(7) Battery cell production facility. Battery cell production facility means a facility in which battery cells are manufactured or assembled.
(8) Battery component. Battery component means a component that forms part of a clean vehicle battery and that is manufactured or assembled from one or more components or battery materials that are combined through industrial, chemical, and physical assembly steps. Battery components may include, but are not limited to, a cathode electrode, anode electrode, solid metal electrode, coated separator, liquid electrolyte, solid state electrolyte, battery cell, and battery module.
(9) Battery materials. Battery materials means direct and indirect inputs to battery components that are produced through processing rather than through manufacturing or assembly. Battery materials are not considered a type of battery component, although battery materials may be manufactured or assembled into battery components. The three categories of battery materials are applicable critical minerals, constituent materials, and battery materials without applicable critical minerals. Examples of battery materials that may or may not contain applicable critical minerals include a separator base film (if not manufactured or assembled) and separator coating. Examples of battery materials without applicable critical minerals include conductive additives, copper foils prior to graphite deposition, and electrolyte solvents.
(10) Clean vehicle battery. Clean vehicle battery, with respect to a new clean vehicle, means the battery from which the electric motor of the vehicle draws electricity to propel such vehicle.
(11) Compliant-battery ledger. A compliant-battery ledger, for a qualified manufacturer for a calendar year, is a ledger established under the rules of § 1.30D-6(d) that tracks the number of available FEOC-compliant batteries for such calendar year.
(12) Constituent materials. Constituent materials means battery materials that contain applicable critical minerals. Constituent materials may include, but are not limited to, powders of cathode active materials, powders of anode active materials, foils, metals for solid electrodes, binders, electrolyte salts, and electrolyte additives, as required for a battery cell. Battery materials without applicable critical minerals are not constituent materials.
(13) Country with which the United States has a free trade agreement in effect—(i) In general. The term country with which the United States has a free trade agreement in effect means any of those countries identified in paragraph (b)(13)(ii) of this section or that the Secretary of the Treasury or her delegate (Secretary) may identify in the future. The criteria the Secretary will consider in determining whether to identify a country under this paragraph (b)(13) include whether an agreement between the United States and that country, as to the critical minerals contained in clean vehicle batteries or more generally, and in the context of the overall commercial and economic relationship between that country and the United States:
(A) Reduces or eliminates trade barriers on a preferential basis;
(B) Commits the parties to refrain from imposing new trade barriers;
(C) Establishes high-standard disciplines in key areas affecting trade (such as core labor and environmental protections); and/or
(D) Reduces or eliminates restrictions on exports or commits the parties to refrain from imposing such restrictions.
(ii) Free trade agreements in effect. The countries with which the United States currently has free trade agreements in effect are: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Japan, Jordan, South Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore.
(iii) Updates. The list of countries in paragraph (b)(13)(ii) of this section may be revised and updated through guidance published in the Federal Register or in the Internal Revenue Bulletin (see § 601.601 of this chapter).
(14) Credit transfer election. Credit transfer election means credit transfer election as defined in § 1.30D-5(b)(2).
(15) Dealer. Dealer means dealer as defined in § 1.30D-5(b)(3).
(16) Dealer tax compliance. Dealer tax compliance means dealer tax compliance as defined in § 1.30D-5(b)(4).
(17) Depreciable vehicle. Depreciable vehicle means a vehicle of a character subject to an allowance for depreciation.
(18) Electing taxpayer. Electing taxpayer means electing taxpayer as defined in § 1.30D-5(b)(5).
(19) Eligible entity. Eligible entity means eligible entity as defined in § 1.30D-5(b)(6).
(20) Excessive payment. Excessive payment means excessive payment as defined in § 1.30D-5(g)(2)(iii).
(21) Extraction. Extraction means the activities performed to harvest minerals or natural resources from the ground or from a body of water. Extraction includes, but is not limited to, operating equipment to harvest minerals or natural resources from mines and wells and the physical processes involved in refining. Extraction also includes operating equipment to extract minerals or natural resources from the waste or residue of prior extraction, including crude oil extraction to the extent that processes applied to that crude oil yield an applicable critical mineral as a byproduct. Extraction concludes when activities are performed to convert raw mined or harvested products or raw well effluent to substances that can be readily transported or stored for direct use in critical mineral processing. Extraction does not include activities that begin with a recyclable commodity (as such activities are recycling). Extraction does not include the chemical and thermal processes involved in refining.
(22) FEOC-compliant. FEOC-compliant means in compliance with the applicable excluded entity requirement under section 30D(d)(7). In particular—
(i) A battery component (other than a battery cell), with respect to a new clean vehicle placed in service after December 31, 2023, is FEOC-compliant if it is not manufactured or assembled by a FEOC;
(ii) An applicable critical mineral, with respect to a new clean vehicle placed in service after December 31, 2024, is FEOC-compliant if it is not extracted, processed, or recycled by a FEOC;
(iii) A battery cell, with respect to a new clean vehicle placed in service after December 31, 2023, and before January 1, 2025, is FEOC-compliant if it is not manufactured or assembled by a FEOC and it contains only FEOC-compliant battery components;
(iv) A battery cell, with respect to a new clean vehicle placed in service after December 31, 2024, is FEOC-compliant if it is not manufactured or assembled by a FEOC and it contains only FEOC-compliant battery components and FEOC-compliant applicable critical minerals; and
(v) A clean vehicle battery, with respect to a new clean vehicle placed in service after December 31, 2023, is FEOC-compliant if it contains only FEOC-compliant battery components (other than battery cells) and FEOC-compliant battery cells (as described in paragraph (b)(22)(iii) or (iv) of this section, as applicable).
(23) Final assembly. Final assembly means the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle. To establish where final assembly of a new clean vehicle occurred for purposes of the requirement in section 30D(d)(1)(G) that final assembly of a new clean vehicle occur within North America, the taxpayer may rely on the following information:
(i) The vehicle's plant of manufacture as reported in the vehicle identification number pursuant to 49 CFR 565; or
(ii) The final assembly point reported on the label affixed to the vehicle as described in 49 CFR 583.5(a)(3).
(24) Foreign entity of concern. Foreign entity of concern (FEOC) has the meaning provided in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5)) and guidance promulgated thereunder by the Department of Energy (DOE).
(25) Impracticable-to-trace battery materials—(i) In general. Impracticable-to-trace battery materials means specifically identified, low-value battery materials that originate from multiple sources and are commingled during refining, processing, or other production processes by suppliers to such a degree that the qualified manufacturer cannot, due to current industry practice, feasibly determine and attest to the origin of such battery materials. For this purpose, impracticable-to-trace battery materials are those that have low value compared to the total value of the clean vehicle battery.
(ii) Identified impracticable-to-trace battery materials. Identified impracticable-to-trace battery materials means applicable critical minerals in the following circumstances: graphite contained in anode materials, and applicable critical minerals contained in electrolyte salts, electrolyte binders, or electrolyte additives.
(26) Incentive. Incentive means incentive as defined in § 1.30D-5(b)(7).
(27) Incremental value. Incremental value means incremental value as defined in § 1.30D-3(c)(2)(i).
(28) Manufacturer—(i) In general. A manufacturer means any manufacturer within the meaning of the regulations prescribed by the Administrator of the Environmental Protection Agency (EPA) for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.) and as defined in 42 U.S.C. 7550(1). Except as provided in paragraph (b)(28)(ii) of this section, if multiple manufacturers are involved in the production of a vehicle, the requirements of section 30D(d)(3) must be met by the manufacturer that satisfies the reporting requirements of the greenhouse gas emissions standards set by the EPA under the Clean Air Act (42 U.S.C. 7521 et seq.) for the subject vehicle.
(ii) Modification of a new motor vehicle. (A) If a manufacturer modifies a new motor vehicle (as defined in 42 U.S.C. 7550(3)) that does not satisfy the requirements of section 30D(d)(1)(F) or (d)(6) so that the new motor vehicle, after modification, does satisfy such requirements, then such manufacturer may satisfy the requirements of section 30D(d)(3) if the modification occurred prior to the new motor vehicle being placed in service.
(B) If a manufacturer modifies a new motor vehicle (as defined in 42 U.S.C. 7550(3)) that does not satisfy the requirements of 45W(c)(3) so that the new motor vehicle, after modification, does satisfy such requirements, then such manufacturer may satisfy the requirements of 30D(d)(3) if the modification occurred prior to the new motor vehicle being placed in service.
(29) Manufacturer's suggested retail price—(i) In general. Manufacturer's suggested retail price means the sum of the retail price and the retail delivered price (as defined in paragraphs (b)(29)(ii) and (iii) of this section) as reported on the label that is affixed to the windshield or side window of the vehicle, as described in 15 U.S.C. 1232.
(ii) Retail price. Retail price, for purposes of paragraph (b)(29)(i) of this section, means the retail price of the automobile suggested by the manufacturer as described in 15 U.S.C. 1232(f)(1).
(iii) Retail delivered price. Retail delivered price, for purposes of paragraph (b)(29)(i) of this section, means the retail delivered price suggested by the manufacturer for each accessory or item of optional equipment physically attached to such automobile at the time of its delivery to the dealer that is not included within the price of such automobile as stated pursuant to 15 U.S.C. 1232(f)(1), as described in 15 U.S.C. 1232(f)(2).
(30) Manufacturing. Manufacturing, with respect to a battery component, means the industrial and chemical steps taken to produce a battery component.
(31) Modified adjusted gross income—(i) Individuals. Modified adjusted gross income, in the case of an individual, means adjusted gross income (as defined in section 62 of the Code) increased by any amount excluded from gross income under section 911, 931, or 933 of the Code.
(ii) Estates and trusts. Modified adjusted gross income, in the case of an estate or non-grantor trust, means adjusted gross income (as defined in section 67(e) of the Code).
(32) New clean vehicle. New clean vehicle means a vehicle that meets the requirements described in section 30D(d). Vehicles that may qualify as new clean vehicles include battery electric vehicles, plug-in hybrid electric vehicles, fuel cell motor vehicles, and plug-in hybrid fuel cell motor vehicles. A vehicle does not meet the requirements of section 30D(d) if—
(i) The qualified manufacturer fails to provide a periodic written report for such vehicle prior to the vehicle being placed in service reporting the vehicle identification number of such vehicle and certifying compliance with the requirement of section 30D(d);
(ii) The qualified manufacturer provides incorrect information with respect to the periodic written report for such vehicle;
(iii) The qualified manufacturer fails to update its periodic written report in the event of a material change with respect to such vehicle; or
(iv) For new clean vehicles placed in service after December 31, 2024, the qualified manufacturer fails to meet the requirements of § 1.30D-6(d).
(33) New qualified fuel cell motor vehicle. New qualified fuel cell motor vehicle means any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) that meets the requirements under section 30D(d)(1)(G) (that is, the final assembly in North America requirement) and (H) (that is, the seller report requirement), and that does not have a clean vehicle battery.
(34) North America. North America means the territory of the United States, Canada, and Mexico as defined in 19 CFR part 182, appendix A, § 1(1).
(35) North American battery component. North American battery component means North American battery component as defined in § 1.30D-3(c)(2)(ii).
(36) Placed in service. A new clean vehicle is considered to be placed in service on the date the taxpayer takes possession of the vehicle.
(37) Processing. Processing means the non-physical processes involved in the refining of non-recycled substances or materials, including the treating, baking, and coating processes used to convert such substances and materials into constituent materials. Processing includes the chemical or thermal processes involved in refining. Processing does not include the physical processes involved in refining.
(38) Procurement chain. Procurement chain means procurement chain as defined in § 1.30D-3(c)(1)(i).
(39) Qualifying battery component content. Qualifying battery component content means qualifying battery component content as defined in § 1.30D-3(c)(2)(iii).
(40) Qualifying critical mineral. Qualifying critical mineral means qualifying critical mineral as defined in § 1.30D-3(c)(1)(ii).
(41) Qualifying critical mineral content. Qualifying critical mineral content means qualifying critical mineral content as defined in § 1.30D-3(c)(1)(iii).
(42) Qualified manufacturer. A qualified manufacturer means a manufacturer that meets the requirements described in section 30D(d)(3) at the time the manufacturer submits a periodic written report to the IRS under a written agreement described in section 30D(d)(3). The term qualified manufacturer does not include any manufacturer whose qualified manufacturer status has been terminated by the IRS. The IRS may terminate qualified manufacturer status for fraud, intentional disregard, or gross negligence with respect to any requirements of section 30D, the section 30D regulations, or any guidance under section 30D, including with respect to the periodic written reports described in section 30D(d)(3) and paragraph (b)(32) of this section and any attestations, documentation, or certifications described in §§ 1.30D-3(d) and 1.30D-6(d), at the time and in the manner provided in the Internal Revenue Bulletin (see § 601.601 of this chapter). See § 1.30D-6(f) for additional rules regarding inaccurate determinations and documentation. The IRS may also terminate qualified manufacturer status for fraud, intentional disregard, or gross negligence with respect to any requirement of section 25E or section 45W or any regulations thereunder.
(43) Recycling—(i) In general. Recycling means the series of activities during which recyclable materials containing critical minerals are transformed into specification-grade commodities and consumed in lieu of virgin materials to create new constituent materials; such activities result in new constituent materials contained in the clean vehicle battery. All physical, chemical, and thermal treatments or modifications that convert recycled feedstocks to specification grade constituent materials are included in recycling. However, recycled applicable critical minerals and associated constituent materials are only subject to the requirements under §§ 1.30D-3(a) and 1.30D-6 if the recyclable material contains an applicable critical mineral, contains material that was transformed from an applicable critical mineral, or if the recyclable material is used to produce an applicable critical mineral at any point during the recycling process. The requirements under §§ 1.30D-3(a) and 1.30D-6 only take into account activities that occurred during the recycling process.
(ii) Example: Recycling of applicable critical mineral. Mineral Z, an applicable critical mineral in a form listed in section 45X(c)(6), was processed by A in a prior production process. Mineral Z subsequently was derived from recyclable material in a form not listed in section 45X(c)(6). Mineral Z was recycled by B. The requirements under §§ 1.30D-3 and 1.30D-6 only take into account the activities conducted by B.
(44) Registered dealer. Registered dealer means registered dealer as defined in § 1.30D-5(b)(8).
(45) Section 30D regulations. Section 30D regulations means § 1.30D-1, this section, and §§ 1.30D-3 through 1.30D-6.
(46) Seller report. Seller report means the report described in section 30D(d)(1)(H) that the seller of a new clean vehicle provides to the taxpayer and the IRS in the manner provided in, and containing the information described in, guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter). The seller report must be transmitted to the IRS electronically. The term seller report does not include a report rejected by the IRS due to the information contained therein not matching IRS records.
(47) Time of sale. Time of sale means time of sale as defined in § 1.30D-5(b)(9).
(48) Total incremental value of battery components. Total incremental value of battery components means total incremental value of battery components as defined in § 1.30D-3(c)(2)(iv).
(49) Total incremental value of North American battery components. Total incremental value of North American battery components means total incremental value of North American battery components as defined in § 1.30D-3(c)(2)(v).
(50) Total traced qualifying value. Total traced qualifying value means total traced qualifying value as defined in § 1.30D-3(c)(1)(iv).
(51) Total value of critical minerals. Total value of critical minerals means total value of critical minerals as defined in § 1.30D-3(c)(1)(v).
(52) Total value of qualifying critical minerals. Total value of qualifying critical minerals means total value of qualifying critical minerals as defined in § 1.30D-3(c)(1)(vi).
(53) Traced qualifying value. Traced qualifying value means traced qualifying value as defined in § 1.30D-3(c)(1)(vii).
(54) Value. Value, with respect to property, means the arm's-length price that was paid or would be paid for the property by an unrelated purchaser determined in accordance with the principles of section 482 of the Code and regulations thereunder.
(55) Value added. Value added means value added as defined in § 1.30D-3(c)(1)(viii).
(56) Vehicle classification—(i) In general. Vehicle classification means the vehicle classification of a new clean vehicle determined consistent with the rules and definitions provided in 40 CFR 600.315-08 and this paragraph (b)(56) for vans, sport utility vehicles, pickup trucks, and other vehicles.
(ii) Van. Van means a vehicle classified as a van or minivan under 40 CFR 600.315-08(a)(2)(iii) and (iv), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
(iii) Sport utility vehicle. Sport utility vehicle means a vehicle classified as a small sport utility vehicle or standard sport utility vehicle under 40 CFR 600.315-08(a)(2)(v) and (vi), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
(iv) Pickup truck. Pickup truck means a vehicle classified as a small pickup truck or standard pickup truck under 40 CFR 600.315-08(a)(2)(i) and (ii), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
(v) Other vehicle. Other vehicle means any vehicle classified in one of the classes of passenger automobiles listed in 40 CFR 600.315-08(a)(1), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
(c) Severability. The provisions of this section are separate and severable from one another. If any provision of this section is stayed or determined to be invalid, it is the agencies' intention that the remaining provisions shall continue in effect.
(d) Applicability date. This section applies to taxable years ending after December 4, 2023.
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Treas. Reg. §1.30D-2(a)In general.
In general. The definitions in this section apply for purposes of section 30D of the Internal Revenue Code (Code) and the section 30D regulations.
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Treas. Reg. §1.30D-2(b)Definitions—(1) Advance payment program.
Definitions—(1) Advance payment program. Advance payment program means advance payment program as defined in § 1.30D-5(b)(1).
(2) Applicable critical mineral—(i) In general. Applicable critical mineral means an applicable critical mineral as defined in section 45X(c)(6) of the Code. The requirements of §§ 1.30D-3(a) and 1.30D-6 with respect to an applicable critical mineral take into account each step of extraction, processing, or recycling through the step in which such mineral is processed or recycled into a constituent material, even if the mineral is not in a form listed in section 45X(c)(6) at every step of production. However, an applicable critical mineral is disregarded for purposes of the requirements of §§ 1.30D-3(a) and 1.30D-6 if it is fully consumed in the production of the constituent material or battery component and no longer remains in any form in the battery.
(ii) Example: Form of applicable critical mineral. Mineral Y is extracted and is intended to be incorporated into the battery of an electric vehicle. Mineral Y is not in a form listed in section 45X(c)(6) at the time of such extraction, but subsequently it is refined into an applicable critical mineral form listed in section 45X(c)(6). Both the extraction and processing are taken into account for purposes of the requirements of §§ 1.30D-3(a) and 1.30D-6.
(3) Assembly. Assembly, with respect to battery components, means the process of combining battery components into battery cells and battery modules.
(4) Associated constituent material. Associated constituent material, with respect to an applicable critical mineral, means a constituent material that has been processed or recycled from such mineral into the constituent material with which it is associated, even if that processing or recycling transformed such mineral into a form not listed in section 45X(c)(6).
(5) Battery. Battery, for purposes of a new clean vehicle, means a collection of one or more battery modules, each of which has two or more electrically configured battery cells in series or parallel, to create voltage or current. The term battery does not include items such as thermal management systems or other parts of a battery cell or module that do not directly contribute to the electrochemical storage of energy within the battery, such as battery cell cases, cans, or pouches.
(6) Battery cell. Battery cell means a combination of battery components (other than battery cells) capable of electrochemically storing energy from which the electric motor of a new clean vehicle draws electricity.
(7) Battery cell production facility. Battery cell production facility means a facility in which battery cells are manufactured or assembled.
(8) Battery component. Battery component means a component that forms part of a clean vehicle battery and that is manufactured or assembled from one or more components or battery materials that are combined through industrial, chemical, and physical assembly steps. Battery components may include, but are not limited to, a cathode electrode, anode electrode, solid metal electrode, coated separator, liquid electrolyte, solid state electrolyte, battery cell, and battery module.
(9) Battery materials. Battery materials means direct and indirect inputs to battery components that are produced through processing rather than through manufacturing or assembly. Battery materials are not considered a type of battery component, although battery materials may be manufactured or assembled into battery components. The three categories of battery materials are applicable critical minerals, constituent materials, and battery materials without applicable critical minerals. Examples of battery materials that may or may not contain applicable critical minerals include a separator base film (if not manufactured or assembled) and separator coating. Examples of battery materials without applicable critical minerals include conductive additives, copper foils prior to graphite deposition, and electrolyte solvents.
(10) Clean vehicle battery. Clean vehicle battery, with respect to a new clean vehicle, means the battery from which the electric motor of the vehicle draws electricity to propel such vehicle.
(11) Compliant-battery ledger. A compliant-battery ledger, for a qualified manufacturer for a calendar year, is a ledger established under the rules of § 1.30D-6(d) that tracks the number of available FEOC-compliant batteries for such calendar year.
(12) Constituent materials. Constituent materials means battery materials that contain applicable critical minerals. Constituent materials may include, but are not limited to, powders of cathode active materials, powders of anode active materials, foils, metals for solid electrodes, binders, electrolyte salts, and electrolyte additives, as required for a battery cell. Battery materials without applicable critical minerals are not constituent materials.
(13) Country with which the United States has a free trade agreement in effect—(i) In general. The term country with which the United States has a free trade agreement in effect means any of those countries identified in paragraph (b)(13)(ii) of this section or that the Secretary of the Treasury or her delegate (Secretary) may identify in the future. The criteria the Secretary will consider in determining whether to identify a country under this paragraph (b)(13) include whether an agreement between the United States and that country, as to the critical minerals contained in clean vehicle batteries or more generally, and in the context of the overall commercial and economic relationship between that country and the United States:
(A) Reduces or eliminates trade barriers on a preferential basis;
(B) Commits the parties to refrain from imposing new trade barriers;
(C) Establishes high-standard disciplines in key areas affecting trade (such as core labor and environmental protections); and/or
(D) Reduces or eliminates restrictions on exports or commits the parties to refrain from imposing such restrictions.
(ii) Free trade agreements in effect. The countries with which the United States currently has free trade agreements in effect are: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Japan, Jordan, South Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore.
(iii) Updates. The list of countries in paragraph (b)(13)(ii) of this section may be revised and updated through guidance published in the Federal Register or in the Internal Revenue Bulletin (see § 601.601 of this chapter).
(14) Credit transfer election. Credit transfer election means credit transfer election as defined in § 1.30D-5(b)(2).
(15) Dealer. Dealer means dealer as defined in § 1.30D-5(b)(3).
(16) Dealer tax compliance. Dealer tax compliance means dealer tax compliance as defined in § 1.30D-5(b)(4).
(17) Depreciable vehicle. Depreciable vehicle means a vehicle of a character subject to an allowance for depreciation.
(18) Electing taxpayer. Electing taxpayer means electing taxpayer as defined in § 1.30D-5(b)(5).
(19) Eligible entity. Eligible entity means eligible entity as defined in § 1.30D-5(b)(6).
(20) Excessive payment. Excessive payment means excessive payment as defined in § 1.30D-5(g)(2)(iii).
(21) Extraction. Extraction means the activities performed to harvest minerals or natural resources from the ground or from a body of water. Extraction includes, but is not limited to, operating equipment to harvest minerals or natural resources from mines and wells and the physical processes involved in refining. Extraction also includes operating equipment to extract minerals or natural resources from the waste or residue of prior extraction, including crude oil extraction to the extent that processes applied to that crude oil yield an applicable critical mineral as a byproduct. Extraction concludes when activities are performed to convert raw mined or harvested products or raw well effluent to substances that can be readily transported or stored for direct use in critical mineral processing. Extraction does not include activities that begin with a recyclable commodity (as such activities are recycling). Extraction does not include the chemical and thermal processes involved in refining.
(22) FEOC-compliant. FEOC-compliant means in compliance with the applicable excluded entity requirement under section 30D(d)(7). In particular—
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Treas. Reg. §1.30D-2(c)Severability.
Severability. The provisions of this section are separate and severable from one another. If any provision of this section is stayed or determined to be invalid, it is the agencies' intention that the remaining provisions shall continue in effect.
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Treas. Reg. §1.30D-2(d)Applicability date.
Applicability date. This section applies to taxable years ending after December 4, 2023.
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Treas. Reg. §1.30D-2(i)§1.30D-2(i)
The qualified manufacturer fails to provide a periodic written report for such vehicle prior to the vehicle being placed in service reporting the vehicle identification number of such vehicle and certifying compliance with the requirement of section 30D(d);
(ii) The qualified manufacturer provides incorrect information with respect to the periodic written report for such vehicle;
(iii) The qualified manufacturer fails to update its periodic written report in the event of a material change with respect to such vehicle; or
(iv) For new clean vehicles placed in service after December 31, 2024, the qualified manufacturer fails to meet the requirements of § 1.30D-6(d).
(33) New qualified fuel cell motor vehicle. New qualified fuel cell motor vehicle means any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) that meets the requirements under section 30D(d)(1)(G) (that is, the final assembly in North America requirement) and (H) (that is, the seller report requirement), and that does not have a clean vehicle battery.
(34) North America. North America means the territory of the United States, Canada, and Mexico as defined in 19 CFR part 182, appendix A, § 1(1).
(35) North American battery component. North American battery component means North American battery component as defined in § 1.30D-3(c)(2)(ii).
(36) Placed in service. A new clean vehicle is considered to be placed in service on the date the taxpayer takes possession of the vehicle.
(37) Processing. Processing means the non-physical processes involved in the refining of non-recycled substances or materials, including the treating, baking, and coating processes used to convert such substances and materials into constituent materials. Processing includes the chemical or thermal processes involved in refining. Processing does not include the physical processes involved in refining.
(38) Procurement chain. Procurement chain means procurement chain as defined in § 1.30D-3(c)(1)(i).
(39) Qualifying battery component content. Qualifying battery component content means qualifying battery component content as defined in § 1.30D-3(c)(2)(iii).
(40) Qualifying critical mineral. Qualifying critical mineral means qualifying critical mineral as defined in § 1.30D-3(c)(1)(ii).
(41) Qualifying critical mineral content. Qualifying critical mineral content means qualifying critical mineral content as defined in § 1.30D-3(c)(1)(iii).
(42) Qualified manufacturer. A qualified manufacturer means a manufacturer that meets the requirements described in section 30D(d)(3) at the time the manufacturer submits a periodic written report to the IRS under a written agreement described in section 30D(d)(3). The term qualified manufacturer does not include any manufacturer whose qualified manufacturer status has been terminated by the IRS. The IRS may terminate qualified manufacturer status for fraud, intentional disregard, or gross negligence with respect to any requirements of section 30D, the section 30D regulations, or any guidance under section 30D, including with respect to the periodic written reports described in section 30D(d)(3) and paragraph (b)(32) of this section and any attestations, documentation, or certifications described in §§ 1.30D-3(d) and 1.30D-6(d), at the time and in the manner provided in the Internal Revenue Bulletin (see § 601.601 of this chapter). See § 1.30D-6(f) for additional rules regarding inaccurate determinations and documentation. The IRS may also terminate qualified manufacturer status for fraud, intentional disregard, or gross negligence with respect to any requirement of section 25E or section 45W or any regulations thereunder.
(43) Recycling—(i) In general. Recycling means the series of activities during which recyclable materials containing critical minerals are transformed into specification-grade commodities and consumed in lieu of virgin materials to create new constituent materials; such activities result in new constituent materials contained in the clean vehicle battery. All physical, chemical, and thermal treatments or modifications that convert recycled feedstocks to specification grade constituent materials are included in recycling. However, recycled applicable critical minerals and associated constituent materials are only subject to the requirements under §§ 1.30D-3(a) and 1.30D-6 if the recyclable material contains an applicable critical mineral, contains material that was transformed from an applicable critical mineral, or if the recyclable material is used to produce an applicable critical mineral at any point during the recycling process. The requirements under §§ 1.30D-3(a) and 1.30D-6 only take into account activities that occurred during the recycling process.
(ii) Example: Recycling of applicable critical mineral. Mineral Z, an applicable critical mineral in a form listed in section 45X(c)(6), was processed by A in a prior production process. Mineral Z subsequently was derived from recyclable material in a form not listed in section 45X(c)(6). Mineral Z was recycled by B. The requirements under §§ 1.30D-3 and 1.30D-6 only take into account the activities conducted by B.
(44) Registered dealer. Registered dealer means registered dealer as defined in § 1.30D-5(b)(8).
(45) Section 30D regulations. Section 30D regulations means § 1.30D-1, this section, and §§ 1.30D-3 through 1.30D-6.
(46) Seller report. Seller report means the report described in section 30D(d)(1)(H) that the seller of a new clean vehicle provides to the taxpayer and the IRS in the manner provided in, and containing the information described in, guidance published in the Internal Revenue Bulletin (see § 601.601 of this chapter). The seller report must be transmitted to the IRS electronically. The term seller report does not include a report rejected by the IRS due to the information contained therein not matching IRS records.
(47) Time of sale. Time of sale means time of sale as defined in § 1.30D-5(b)(9).
(48) Total incremental value of battery components. Total incremental value of battery components means total incremental value of battery components as defined in § 1.30D-3(c)(2)(iv).
(49) Total incremental value of North American battery components. Total incremental value of North American battery components means total incremental value of North American battery components as defined in § 1.30D-3(c)(2)(v).
(50) Total traced qualifying value. Total traced qualifying value means total traced qualifying value as defined in § 1.30D-3(c)(1)(iv).
(51) Total value of critical minerals. Total value of critical minerals means total value of critical minerals as defined in § 1.30D-3(c)(1)(v).
(52) Total value of qualifying critical minerals. Total value of qualifying critical minerals means total value of qualifying critical minerals as defined in § 1.30D-3(c)(1)(vi).
(53) Traced qualifying value. Traced qualifying value means traced qualifying value as defined in § 1.30D-3(c)(1)(vii).
(54) Value. Value, with respect to property, means the arm's-length price that was paid or would be paid for the property by an unrelated purchaser determined in accordance with the principles of section 482 of the Code and regulations thereunder.
(55) Value added. Value added means value added as defined in § 1.30D-3(c)(1)(viii).
(56) Vehicle classification—(i) In general. Vehicle classification means the vehicle classification of a new clean vehicle determined consistent with the rules and definitions provided in 40 CFR 600.315-08 and this paragraph (b)(56) for vans, sport utility vehicles, pickup trucks, and other vehicles.
(ii) Van. Van means a vehicle classified as a van or minivan under 40 CFR 600.315-08(a)(2)(iii) and (iv), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
(iii) Sport utility vehicle. Sport utility vehicle means a vehicle classified as a small sport utility vehicle or standard sport utility vehicle under 40 CFR 600.315-08(a)(2)(v) and (vi), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
(iv) Pickup truck. Pickup truck means a vehicle classified as a small pickup truck or standard pickup truck under 40 CFR 600.315-08(a)(2)(i) and (ii), or otherwise so classified by the Administrator of the EPA pursuant to 40 CFR 600.315-08(a).
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