Tommy purchased a new clean electric vehicle in 2023. What is the amount of the Clean Vehicle Tax Credit, assuming the transaction otherwise qualifies for the maximum tax credit?

As of my knowledge cutoff in early 2023, the Clean Vehicle Tax Credit (formerly known as the Electric Vehicle Tax Credit) for new electric vehicles can be up to $7,500. However, the actual amount of the credit depends on the battery capacity and the gross vehicle weight rating of the vehicle. To qualify for the maximum credit, the vehicle must meet the following criteria: 1. It must be a new vehicle. 2. It must be placed in service by the taxpayer in the tax year the credit is being claimed. 3. It must be used predominantly in the United States. 4. It must meet specific domestic assembly and critical mineral/battery component requirements as outlined in the Inflation Reduction Act of 2022. It's important to note that there are income limits for taxpayers claiming the credit, and the vehicle must be purchased from a manufacturer that has not hit the 200,000-vehicle sales cap, which was applicable before the Inflation Reduction Act of 2022. The new law changed the requirements and removed the sales cap, but it introduced other criteria that must be met. Additionally, the credit is nonrefundable, which means it can reduce your tax liability to zero, but you won't receive a refund for any portion of the credit that exceeds your tax liability. Please consult the IRS website or a tax professional for the most current information, as tax laws and regulations can change, and there may be additional guidance or changes after my knowledge cutoff date.

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