NW Golf Carts, Inc

In 2008 the Emergency Economic Stabilization Act was passed that became effective in 2009. In the Energy section of the bill, there is a tax credit of $4,234.72 for Low Speed Vehicles purchased by 12/31/2009. This tax credit has a phase-out period that is initiated when the manufacturers sell over 250,000 electric drive vehicles. The manufacturers of the Electric Vehicles must submit Quarterly reports to the IRS. The Bush Administration included this tax credit as part of the 2009 Emergency Economic Stabilization Act in response to Americans struggling with rising gas prices.  The National intent of creating the Neighborhood Electric Vehicle also known as a Low Speed Vehicle (LSV) was to address air pollution by getting more people into electric vehicles and out of their gas guzzlers - part of the clean air movement for a greener planet. The Low Speed Vehicle has been on the market at least since 2006. 

The IRS Notice 2009-54 outlines the procedures and requirements to claim the new Qualified Plug-in Electric Drive Motor Vehicle Credit for the 2009 tax year.    
         

In November 2009, the Obama Administration modified the tax credit bill and those changes are explained in the IRS Notice 2009-89. The most significant changes are as follows:

     In 2009 the definition of acquired was not defined well so it was clarified in the November notice. Acquired. A vehicle is not “acquired” before the date on which title to that vehicle passes under state law.

     Another change modifies the tax credit calculation. In 2010 the number of kilowatts used to calculate the base of the tax credit is increased to 5 kilowatts. Essentially the tax credit from 2009 is reduced by $417.

     Another change is the phase-out period threshold. In 2010 the phase-out period begins when the manufacturers reach 200,000 electric drive vehicles sold.

Currently we are waiting for all the Manufacturers to submit their sales number for the 2009 year. Once they do that the IRS will establish if the manufacturers have reached their phase-out period yet and then they can determine if the tax credit will be the full amount in 2010 or will it be in the phase-out period of 50% of the tax credit.

For additional information, please refer to IRS News Release IR-2009-45, IRS Notice 2009-54  and IRS Notice 2009-89.


Disclaimer: In this and any tax matter, taxpayer should consult their tax advisor to determine qualification for any tax credit and to clarify the benefit that may be available given their individual circumstances.

The IRS received from all the manufacturers their sales numbers as of 12/31/09 by January 31, 2010.

The next step is that each Electric Vehicle manufacturer must have their vehicles re-certified to define the amount of the 2010 tax credit.

Since the vehicles last year were not certified until late August most likely none of the manufacturers reached the tax credit phase out limit of 200,000 cars, so they tax credit should match the amount that the vehicles had last year minus $417.