Additional Vehicle Considerations

Depreciation of Business Vehicles

If the actual expense method is used, depreciation may be claimed for vehicles used more than 50% for business purposes. For 2025, the depreciation limits for passenger vehicles are as follows:

• First year: $12,400 (if no bonus depreciation is claimed)
• Second year: $19,800
• Third year: $11,900
• Each succeeding year: $7,160

Commercial Clean Vehicle Credit

Small business owners purchasing qualified clean vehicles may be eligible for the Commercial Clean Vehicle Credit under.  The credit amount can be up to $40,000, depending on the vehicle’s weight and engine type. To qualify:

• The vehicle must be used primarily in the business.
• It must meet specific environmental and manufacturing criteria.