IRS 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 low mileage credits on your Form 2290 if your heavy vehicle was stolen, destroyed, sold, or driven under 5,000 miles.
If your vehicle falls into the 2290 low mileage credit vehicle category, you are eligible for tax credits. In this blog, you will learn all about 2290 credits, how to qualify for them, and what are the reasons under which you can claim them.
Understanding Low Mileage Credit
The low mileage credit refers to the tax credit that can be claimed for heavy vehicles. If your heavy vehicle travels less than 5,000 miles (7,500 miles or less for agricultural vehicles) during the tax period are qualified for the low mileage credit.
This exemption allows the heavy vehicles to be free from tax liability and claim credits for the remaining tax period. Generally, the tax period runs between July 1 and June 30 of the following year. This low mileage credit is typically advantageous for vehicle owners who seldom use their vehicles.
What are Suspended Vehicles?
Heavy vehicles that have run less than 5,000 miles on the highway are marked as suspended vehicles. These suspended vehicles are not required to pay the tax but must report it on Form 2290. The reporting of the suspended vehicles in the 2290 form allows the IRS to keep a record of these vehicles and verify whether they are eligible or not.
How Can You Claim Low Mileage Credits with Form 8849?
Form 8849 is used for a refund or credit request for the HVUT tax you already paid with the IRS. This is an option for vehicles that are sold or damaged, along with the low mileage vehicles. The steps for filing Form 8849 are:
- Create a free account on the EZ2290 platform or log in with your credentials.
- Select Form 8849, enter the details, such as business information and tax-year end month, underutilized miles, taxpayer identification number (TIN), VIN (vehicle identification number), taxable gross weight, originally filed tax period, and first used month.
- Enter the relevant schedule: As numerous schedules are available for multiple scenarios, attach only the relevant schedule. Before filing, carefully go through the quick guides on schedules.
- Submit the refund claim by filing Form 8849 with EZ2290 for the tax year 2024-25. Once it’s submitted, you will be notified.
How Do You Qualify for Low Mileage Credits with Form 2290?
Here are the steps on how you can claim the credits with Form 2290.
Check Eligibility:
First, ensure your vehicle runs less than 5,000 miles during the tax year 2024-25, though the threshold for agricultural vehicles is 7,500 miles. This is a must-have criterion for qualifying for the 2290 low mileage credit.
Fill out Form 2290:
Enter all essential information, which includes business information, the employer identification number (EIN), the vehicle identification number (VIN), and the taxable gross weight of the vehicle. Carefully check every detail that you put in every section.
Claim Suspension:
In part 2 of the Form mentions that the vehicle is suspended because the truck has traveled not more than 5,000 miles in the current tax period. Tax suspension only applies to those vehicles. If your vehicle falls into this category, you are exempt from paying tax.
Claim Credit:
Provide a record of the vehicle’s mileage and proper documents, like logbooks, trip sheets, and electronic tracking records. These are compulsory for the mileage Form 2024. Indicate the total miles the vehicle covers; the IRS mileage calculator calculates it, and you can claim credit accordingly.
