Do you have questions about the income cap or increased rebate? Get details below.
Important Information Regarding Income Verification
The Treasury Department and Internal Revenue Service (IRS) announced that the federal income tax filing due date for the 2019 tax year is extended from April 15, 2020, to July 15, 2020. CVRP will begin requesting 2019 income information for applications submitted on or after July 16, 2020. If an applicant has filed their taxes for a tax year before CVRP switches to requesting it, the applicant may request that CVRP evaluate that tax year.
The IRS is experiencing significant delays in processing 4506-T forms submitted for Income Verification. If your application was selected for Income Verification, CVRP recommends applicant’s request their Tax Return Transcript online, free of charge, by visiting the IRS Get Transcript website. This document may be submitted along with your 4506-T to support processing your application.
Income eligibility requirements were introduced to the program for individual applications on March 29, 2016.
At the time an applicant submits a signed application for a rebate, the most current CVRP Implementation Manual available, as well as the Terms and Conditions signed by the applicant, will apply. Both the Terms and Conditions and Implementation Manual in place at the time of application submission will determine the applicant’s eligibility for the program. These governing documents are updated several times every year and changes may impact how an applicant’s income is calculated, and therefore the applicant’s eligibility for the program. The next scheduled updates to CVRP governing documents can be found in the CVRP FAQs.
Gross Annual Income Definition
For the purposes of CVRP, gross income includes both taxable and non-taxable income sources. This includes, but is not limited to, the following:
Wages, unemployment, workers' compensation, Social Security, Supplemental Security Income, public assistance, veterans' payments, survivor benefits, pension or retirement income, interest, dividends, rents, royalties, income from estates, trusts, educational assistance, alimony, child support, assistance from outside the household, and other miscellaneous sources.
An applicant’s most recent federal tax return (as reflected on their IRS tax transcript) or other proof of income documentation as determined by the Administrator may be used to help calculate gross annual income. CVRP considers an applicant’s most recent federal tax return to be the one most recently required to be filed by the IRS. CVRP switches to requesting a new tax filing year for applications submitted the day after the federal income tax filing due date.
For applications submitted using the 2018 tax year, the Administrator will review the following sections of an applicant’s federal tax return as reflected on their IRS tax transcript to determine gross annual income:
- On 2018 IRS Form 1040: Sum of lines 1–5. Line 6 is not used to calculate total gross income for the Clean Vehicle Rebate Project.
and (if applicable),
- On 2018 IRS Form 1040 Schedule 1: Sum of lines 10-21. (Excluding lines 15, 16 and 20, as they are already included as part of your 1040).
Note: If Line 21, “Other Income,” is negative, then it will not be included as part of CVRP’s income calculation, unless an exception applies. If Line 21 on Schedule 1 is negative, then the corresponding “Statement” filed with your 1040 must be provided. CSE will review documentation for possible exceptions. One such exception is the inclusion of a negative community property adjustment. Net operating losses carried over from previous years are not an exception.
Updated IRS tax forms were released for use starting with the 2019 tax year. As a result, for applications submitted using the 2019 tax year, the Administrator will review the following sections of an applicant’s federal tax return as reflected on their IRS tax transcript to help determine gross annual income:
- On 2019 IRS Form 1040: Sum of lines 1–6. Line 7 is not used to calculate total gross income for the Clean Vehicle Rebate Project.
and (if applicable),
- On 2019 IRS Form 1040 Schedule 1: Sum of lines 1-8.
Note: If Line 8, “Other Income,” is negative, then it will not be included as part of CVRP’s income calculation, unless an exception applies. If Line 8 on Schedule 1 is negative, then the corresponding “Statement” filed with your 1040 must be provided. CSE will review documentation for possible exceptions. One such exception is the inclusion of a negative community property adjustment. Net operating losses carried over from previous years are not an exception.
In some situations, more documentation will be requested at the discretion of the Administrator if tax transcripts do not appear to reflect gross annual income as defined by the Implementation Manual.
Only a portion of applicants are selected for income verification. Please do not submit copies of your federal tax return unless requested by a CVRP team member. See the Income Verification section below for information about income documentation that may be required.
Income Cap for Higher–Income Consumers
Consumers are not eligible for CVRP rebates if their gross annual incomes are above the thresholds listed below. The income cap applies to all eligible vehicle types except fuel–cell electric vehicles.
|Vehicle Date of Purchase/Lease*||Income Cap|
|November 1, 2016 – Present||
AB 544 - High Occupancy Vehicle Decals
For a vehicle purchased on or after January 1, 2018, an applicant's participation in both the Clean Air Vehicle Decal Program and CVRP is based upon both the applicant's gross annual income and the vehicle type:
In other words, for higher-income consumers that purchase or lease a BEV or PHEV that do not qualify for a CVRP rebate, qualification for the Clean Air Decal should be unaffected. Higher-income consumers that purchase or lease a FCEV, and thus, are currently exempt from the income caps listed above, will not receive a rebate if they have received a Clean Air Decal, and vice versa.
Information and updates regarding California’s Clean Air Decals may be found at: www.arb.ca.gov/msprog/carpool/carpool.htm.
Increased Rebate Levels for Low– and Moderate–Income Consumers
Consumers with household incomes less than or equal to 300 percent of the federal poverty level are eligible for an increased rebate amount as listed below. The option to apply for an increased rebate is shown on the online application based on the income information the applicant provides. Applicants who are claimed as dependents are not eligible for increased rebates regardless of their income. Increased rebate amounts are available for fuel–cell electric vehicles, battery electric vehicles, and plug–in hybrid electric vehicles.
|Vehicle Date of Purchase/Lease*||Increased Rebate|
|November 1, 2016 – December 2, 2019||Standard rebate amount† increased by $2,000|
|December 3, 2019 – Present||Standard rebate amount† increased by $2,500|
*For Tesla and other vehicles ordered without a standard lease/purchase agreement, the date of first registration with the California DMV will be considered the date of purchase or lease.
†Standard rebate amounts are available on CVRP’s list of eligible vehicles, located at cleanvehiclerebate.org/eligible-vehicles. The rebate for an eligible vehicle will be issued to the qualified recipient in a single allotment.
For the purposes of CVRP, a household includes all family members or other unrelated persons, including the rebate applicant, who reside together and/or share common living expenses. Income verification is completed for all members of the household ages 18 years and older. Note: Roommates who do not have a lease separate from the applicant are considered part of the applicant’s household.
The table below lists the Increased Rebate Household Income Limits effective July 1st 2019. These numbers are based on 300% of the 2019 Federal Poverty Level. For example, a family of 3 with a combined household income of less than $63,990 would qualify for the increased rebate.
|Household Size||Combined Household Income must be less than*:|
For households with more than 8 persons, add $13,260 for each additional person.
*These values are equal to 300% of the 2019 Federal Poverty Level Guidelines
Federal poverty level is updated annually, usually in the first calendar quarter of the year. CVRP applies the update on the second Wednesday in July of that year to all applications received on or after that date. The current levels can be found at https://aspe.hhs.gov/poverty-guideline.
Only a portion of applicants are selected for income verification. Businesses are not subject to income verification or income requirements. If you are not selected, you do not need to submit proof of income. If you are selected, you must provide proof of income. Failure to provide documentation for income verification will result in your application being cancelled and no rebate issued. See our FAQ "How do I know if I’ve been selected for income verification?" for more information.
For applicants selected for income verification and whose most recent tax year transcripts are not available, additional documentation will be required to verify compliance with current income requirements. Examples of additional documentation that may be required include paystubs, bank statements, W2s etc. Filing an extension for the tax year being requested is not considered filing for the purposes of CVRP income calculations. In these cases, additional documentation will be requested to evaluate the applicant’s income for that non-filing year.
Consumers applying for standard rebate:
Standard rebate applicants selected* for income verification must submit IRS Form 4506-T†, Request for Transcript of Tax Return, as proof of income. Please review the guidance in our Sample Supporting Documents to ensure you correctly complete this form and avoid delays in your verification.
Consumers applying for increased rebate:
Increased rebate applicants selected* for income verification must submit:
- One completed Household Summary Form that reflects the current household size
- A completed IRS Form 4506-T†for every household member age 18 and older currently living in the household, regardless of filing status or dependency
Additional documentation may be requested to provide complete details on income and household size.
Please review the guidance in our Sample Supporting Documents to ensure you correctly complete the forms above and avoid delays in your verification.
If an applicant participates in one or more of the public assistance programs on CVRP’s Categorical Eligibility List, they may also submit documentation confirming their participation for consideration by the Administrator. Note that depending on the program, documentation required may vary.
†You may request your Tax Return Transcript online, free of charge, by visiting the IRS Get Transcript website. This document may be submitted along with your 4506-T to support processing your application. Applicants will be required to self-request their transcripts in cases where CVRP is unable to obtain a copy from the IRS. For applicants who believe they may be marked for fraud, self-requesting your transcript in advance may help avoid delays in processing your application. If we cannot obtain a copy of your transcript within the required timeframe, your application will be cancelled, and you may be unable to re-apply. Eligibility will be reviewed based on the Terms and Conditions in place at the time a new application is submitted. Extensions will not be granted.
*You do not have to submit proof of income unless you have been selected for income verification.
The California Air Resources Board (CARB) approved the Fiscal Year 2015-16 Low Carbon Transportation Investments and AQIP Funding Plan in late June 2015, which included several changes to the Clean Vehicle Rebate Project (CVRP):
- Income cap for higher–income consumers
- Increased rebate levels for low– and moderate–income consumers
These changes were implemented on March 29, 2016.