Question About Qualification of $7500 Credits for New Clean Vehicles

[workhard2022]

If a taxpayer is a non-resident Alien and files form 1040-NR, does she/he still qualify for this $7500 Credit for New Clean Vehicles in 2023?   I am not sure if this $7500 EV credit only for resident alien or not?

Many thanks!

[BobKamman]

I did a little research on this when the question was posted a couple days ago.  The credit applies against Chapter 1 taxes, and that's where the tax on nonresidents is found.  Beyond that, I would wait for a draft of the 1040NR for 2023, to see if IRS agrees.  

The vehicle must be used in the United States.  But you already know that.  

[workhard2022]

Thank you for your help. I searched this question on Google but can't find any specific regulations or guidance-whether EV credit of $7500 can apply to Non-resident aliens (1040NR).   can you please tell me where did you find the related rules?  Many thanks!

[BobKamman]

All I looked at was Code Section 30D, which starts out "There shall be allowed as a credit against the tax imposed by this chapter . . ."  That's in Chapter 1, which includes the income tax paid by nonresident aliens (in Subchapter N).  

[qbteachmt]

"and files form 1040-NR"

Look at the rules for hybrid, for plug in, and the IRS worksheets often tell you to enter an amount from the "Form 1040, 1040-SR, or 1040-NR" which means, NR is in the provisions. Otherwise, it would not be listed.

Just do some cross-referencing.

[BobKamman]

Yes, there is "new clean vehicle" in the tax code.  That's why I referred her to Section 30D

26 USC § 30D(d)(1)

(1) In general The term “new clean vehicle” means a motor vehicle— (A) the original use of which commences with the taxpayer, (B) which is acquired for use or lease by the taxpayer and not for resale, (C) which is made by a qualified manufacturer, (D) which is treated as a motor vehicle for purposes of title II of the Clean Air Act, (E) which has a gross vehicle weight rating of less than 14,000 pounds, (F) which is propelled to a significant extent by an electric motor which draws electricity from a battery which— (i) has a capacity of not less than 7 kilowatt hours, and (ii) is capable of being recharged from an external source of electricity, (G) the final assembly of which occurs within North America, and (H) 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— (i) the name and taxpayer identification number of the taxpayer, (ii) 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, (iii) the battery capacity of the vehicle, (iv) verification that original use of the vehicle commences with the taxpayer, and (v) the maximum credit under this section allowable to the taxpayer with respect to the vehicle.

[qbteachmt]

Thanks, Bob. I was trying to point out the details matter. Research must be done, but if the form or worksheet references transferring data from 1040, 1040-SR, 1040-NR, that is the clue to what is provided for. Form instructions include "who must use this form" and that is always helpful.

[sjrcpa]

The credit is new for 2023 so the form is not out yet.