CCA 201312034: electric-vehicle credit eligibility and claim years could differ

Plain-English summary

Chief Counsel advised that the year in which a plug-in vehicle qualified for the credit and the year in which the taxpayer could claim the credit could differ. Eligibility was determined by when the vehicle was acquired, meaning when title passed under state law. The credit could be claimed in the taxable year when the vehicle was placed in service, which required actual possession. The advice applied the differing statutory periods in IRC § 30D and the effective-date provision in section 1141(a) of the American Recovery and Reinvestment Act of 2009.

Ruling snapshot

• Question: How did the acquisition date and placed-in-service date affect the plug-in vehicle credit?
• Outcome: Advice given, eligibility was determined on acquisition while the credit was claimed when the vehicle was placed in service.
• Key authorities: IRC § 30D; Notice 2009-89; Pub. L. 111-5, § 1141(a)

Full text (IRS public release)

ID: CCA_2012071210521555 Number: 201312034
Release Date: 3/22/2013
Office: -----------
UILC: 30D.00-00

From: -----------------
Sent: Thursday, July 12, 2012 10:52:16 AM
To: -----------------
Cc: -----------------------------------------
Subject: RE: Specific Authority - Date Acquired 2009

I agree with your analysis. The conclusion is dictated by the differing time periods that congress selected for the determination of eligibility for the two key points related to the credit. For eligibility for the credit itself, congress said that the changes to the credit (which included narrowing the definition of eligible vehicles so that low speed vehicles were no longer included) were effective for vehicles "acquired" after 12/31/09. That determination is made by when title passes under state law (Notice 2009-89). By contrast, the taxable year in which the taxpayer may claim the credit on their return is defined as the year in which the vehicle is "placed in service," which requires that the taxpayer have actual possession of the vehicle (30D(a)). In cases where the vehicle is "acquired" close to the end of the tax year, the differing time periods chosen by congress can conceivably result in the eligibility for the credit being determined in one tax year and the credit actually being claimed in another. ---------------is correct in stating that there is nothing written that states this conclusion specifically but i believe it to be compelled by the language in the statute and in the effective date provision in section 1141(a) of PL 111-5.

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From: ----------------------------------------------------------
Sent: Thursday, July 12, 2012 10:29 AM
To: -----------------
Subject: FW: Specific Authority - Date Acquired 2009

A taxpayer is entitled to claim the amount of Plug-In Vehicle credit the year in which the taxpayer acquires the vehicle (title passes) based on computation provided by Sec. 30D in that specific year. The taxpayer can only take the credit amount starting from the year in which the vehicle is placed in service.