§45W — Title 26 Internal Revenue Code | U.S. Code

Summary

Offers a tax credit to businesses that put qualified commercial clean vehicles into service during the tax year. The credit for each vehicle is the smaller of: 15% of the vehicle’s cost (30% if it is not powered by a gasoline or diesel internal combustion engine), or the extra cost compared with a similar gasoline/diesel vehicle. The extra cost means the vehicle’s purchase price minus the price of a comparable gasoline/diesel vehicle. The credit per vehicle cannot be more than $7,500 for vehicles under 14,000 pounds gross weight, or $40,000 for heavier vehicles. A "qualified commercial clean vehicle" is a vehicle bought to use or lease (not to resell) that meets the program’s technical and use rules (like electric-drive or mobile machinery), has a battery capacity of at least 15 kWh (7 kWh if under 14,000 pounds) and can be recharged, and is generally depreciable. The credit follows rules similar to the clean vehicle credit under section 30D. Certain tax-exempt buyers who buy (not lease) a vehicle are treated differently. You cannot claim this credit if you already claimed the credit under section 30D. You must include the vehicle identification number (VIN) on your tax return. Vehicles bought after September 30, 2025 are not eligible. The Treasury will issue guidance on how to figure the extra cost.

Title 26, §45W

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of section 38, the qualified commercial clean vehicle credit for any taxable year is an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified commercial clean vehicle placed in service by the taxpayer during the taxable year.

(b)(1)Subject to paragraph (4), the amount determined under this subsection with respect to any qualified commercial clean vehicle shall be equal to the lesser of—

(A)15 percent of the basis of such vehicle (30 percent in the case of a vehicle not powered by a gasoline or diesel internal combustion engine), or

(B)the incremental cost of such vehicle.

(2)For purposes of paragraph (1)(B), the incremental cost of any qualified commercial clean vehicle is an amount equal to the excess of the purchase price for such vehicle over such price of a comparable vehicle.

(3)For purposes of this subsection, the term “comparable vehicle” means, with respect to any qualified commercial clean vehicle, any vehicle which is powered solely by a gasoline or diesel internal combustion engine and which is comparable in size and use to such vehicle.

(4)The amount determined under this subsection with respect to any qualified commercial clean vehicle shall not exceed—

(A)in the case of a vehicle which has a gross vehicle weight rating of less than 14,000 pounds, $7,500, and

(B)in the case of a vehicle not described in subparagraph (A), $40,000.

(c)For purposes of this section, the term “qualified commercial clean vehicle” means any vehicle which—

(1)meets the requirements of section 30D(d)(1)(C) and is acquired for use or lease by the taxpayer and not for resale,

(2)either—

(A)meets the requirements of subparagraph (D) of section 30D(d)(1) and is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails), or

(B)is mobile machinery, as defined in section 4053(8) (including vehicles that are not designed to perform a function of transporting a load over the public highways),

(3)either—

(A)is propelled to a significant extent by an electric motor which draws electricity from a battery which has a capacity of not less than 15 kilowatt hours (or, in the case of a vehicle which has a gross vehicle weight rating of less than 14,000 pounds, 7 kilowatt hours) and is capable of being recharged from an external source of electricity, or

(B)is a motor vehicle which satisfies the requirements under subparagraphs (A) and (B) of section 30B(b)(3), and

(4)is of a character subject to the allowance for depreciation.

(d)(1)Rules similar to the rules under subsection (f) of section 30D (without regard to paragraph (10) or (11) thereof) shall apply for purposes of this section.

(2)Subsection (c)(4) shall not apply to any vehicle which is not subject to a lease and which is placed in service by a tax-exempt entity described in clause (i), (ii), or (iv) of section 168(h)(2)(A).

(3)No credit shall be allowed under this section with respect to any vehicle for which a credit was allowed under section 30D.

(e)No credit shall be determined under subsection (a) 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.

(f)The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this section, including regulations or other guidance relating to determination of the incremental cost of any qualified commercial clean vehicle.

(g)No credit shall be determined under this section with respect to any vehicle acquired after September 30, 2025.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2025—Subsec. (g). Pub. L. 119–21 substituted “

September 30, 2025” for “

December 31, 2032”.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 117–169, title I, § 13403(c), Aug. 16, 2022, 136 Stat. 1966, provided that: “The

Amendments

made by this section [enacting this section and amending section 38 and 6213 of this title] shall apply to vehicles acquired after December 31, 2022.”

§45W Credit for Qualified Commercial Clean Vehicles

Summary

Title 26, §45W

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Citations & Metadata