Form 2290, also known as the Heavy Highway Vehicle Use Tax Return, is an annual tax return filed by owners or operators of heavy vehicles with a gross weight of 55,000 pounds or more.
While the primary purpose of this form is to report and pay the Heavy Vehicle Use Tax (HVUT), the IRS also provides a way to claim credits on your Form 2290 if your heavy vehicle was stolen, destroyed, sold, or driven under 5,000 miles.
In this article, we'll learn about Form 2290, who qualifies for a Form 2290 credit, the conditions under which you can claim credits, and how to claim credits in Form 2290.
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Form 2290 is an IRS tax form that must be filed by owners or operators of heavy vehicles with a gross weight of 55,000 pounds or more. It is an annual tax imposed on heavy vehicles used on public highways to support the maintenance and improvement of the country's transportation infrastructure.
The HVUT tax amount is calculated based on the vehicle's gross weight and the number of miles it is expected to be driven during the tax period.
However, vehicles that are used for less than 5,000 miles (7,500 miles for agricultural vehicles) during the tax period may be exempt from the HVUT taxes but are required to file Form 2290.
Credit vehicles, also referred to as creditable vehicles, are those for which credits can be claimed on Form 2290. These vehicles may include those that were sold, stolen, destroyed, or used for minimal mileage during the tax period.
The IRS allows taxpayers to claim credits on Form 2290 under specific circumstances, including:
If a heavy vehicle was sold, destroyed, or stolen during the tax period, a credit can be claimed for the portion of the tax corresponding to the period after the event occurred.
For example, you reported your taxable vehicle and paid $550 from July 1st, 2022, to June 30th, 2023, and later sold your vehicle in December of 2022. You are now eligible to claim a credit on your 2290 for the partial months that you didn’t use (6 months) in the following tax year of July 1st, 2023, to June 30th, 2024.
The Low Mileage Credit is a valuable tax incentive as it can significantly reduce the amount of taxes truck owner needs to pay on their vehicles.
Vehicles that have been used for less than 5,000 miles (7,500 miles or less for agricultural vehicles) during any taxable period may qualify for a low mileage credit. This mileage threshold exempts the vehicles from complete tax liability, allowing taxpayers to claim a credit for the remaining tax period.
To claim low mileage credit, the mileage must be recorded through receipts and other forms of proof. Additionally, the vehicle must have been registered and used in the same state for at least one year before filing Form 2290.
E-file Form 2290 with TaxZerone and claim your credits for the excise tax amount easily!
To claim credits on Form 2290, taxpayers must meet certain conditions and provide the necessary documentation. These conditions may include:
Providing Proof of Sale: When claiming credit for a sold vehicle, taxpayers must provide documentation such as a bill of sale or transfer of ownership to support the claim.
Reporting Stolen or Destroyed Vehicles: In the case of stolen or destroyed vehicles, taxpayers should report these incidents to the appropriate authorities and retain relevant documentation, such as police reports or insurance records, to substantiate the credit claim.
Maintaining Accurate Records: It is crucial to maintain accurate records of vehicle usage, mileage, and any relevant events that may qualify for a credit. Proper documentation ensures the credibility of credit claims and compliance with IRS requirements.
Below are a few necessary things to remember before you claim credits on Form 2290.
The claimed credit amount must not exceed the reported tax amount on the IRS Form 2290. If there is an excess in credit, it must be claimed using Form 8849, Claim for Refund of Excise Taxes and Schedule 6, Other Claims.
You cannot claim the credit until the end of the tax period for the vehicles for which the taxes are paid and used 5,000 miles or less (7,500 miles or less for agricultural vehicles).
You cannot claim a credit, lower tax, exemption, or refund if you reported your taxable vehicles at one weight but occasionally operated at a lower weight class.
You need to claim the credit within three years of filing the actual 2290 return to which the claim relates or two years from the tax reported and paid, whichever is later.
Understanding the importance of claiming credits on Form 2290 is essential for heavy vehicle owners as it provides them an opportunity to maximize their tax benefits while fulfilling tax obligations for heavy highway vehicle use.
By meeting the conditions set by the IRS and maintaining accurate records, taxpayers can make appropriate credit claims on Form 2290.
With TaxZerone, you can claim credits for excise taxes while e-filing your HVUT Form 2290 in 3 simple steps!
Enter the required information, such as your business name, EIN, VIN, taxable gross weight, and first used month (FUM). Now, under the Credit Vehicles section, select a reason for claiming credit, and provide the required details. TaxZerone will automatically calculate your credit amount and tax due based on your input for the tax year.
Review the information you provided in the form, check and rectify errors, and pay the balance tax due using EFW, EFTPS, credit/debit card option.
Transmit the return to the IRS and get your stamped Schedule 1 as soon as the IRS processes it.