The IRS confirmed that General Motors has sold over 200,000 vehicles qualified for the plug-in electric drive motor vehicle credit during the last quarter of 2018.
As a result, a phase out of the tax credit available for purchasers of new General Motors plug-in electric vehicles began on April 1.
Qualifying vehicles by General Motors were eligible for a $7,500 credit if acquired before April 1. Starting April 1, the credit should be $3,750 for General Motors’ eligible vehicles. By Oct. 1, the credit will be decreased to $1,875 for the following two quarters. Subsequently, no credit will be available after March 31, 2020.
The plug-in electric drive motor vehicle credit was enacted in the Energy Improvement and Extension Act of 2008 and subsequently modified in later law. It provides a credit for eligible passenger vehicles and light trucks. By law, five quarters after reaching the sales threshold, the credit ends for the manufacturer. General Motors vehicles are eligible for some portion of a credit until April 1, 2020.
The Qualified Plug-in Electric Drive Motor Vehicle Credit under §30D of the Internal Revenue Code, starts to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the U.S.