If your truck was stolen, destroyed, sold, or driven under 5,000 miles, you might be feeling like you paid your Heavy Highway Vehicle Use Tax for nothing. Luckily, there is some good news on this front: by filing for a tax credit or refund, you could be able to get some of your taxes back.
The HVUT is paid in advance, the same way insurance is. At the top of every Form 2290, it shows the period covered by that tax return (which always renews each July). Just like insurance, if you stop operating your truck before the period is complete, then you have a credit balance for the portion of the period you did not “use”. Insurance companies may send a check or apply a credit to your account balance, and the IRS works the same way with the HVUT.
However, getting your money back can be a bit tricky (navigating these returns can be confusing, to say the least) – but it’s absolutely doable. Below, we’ll dive into exactly who qualifies for a Form 2290 refund or credit, explain how to file one, and clarify your options.
Determining If You’re Owed A Credit Or Refund
Often, people mistakenly claim credits or refunds on vehicles they never paid taxes on, but to qualify for a refund or credit, you must have already paid the HVUT for the full year. Only if you’ve done this and then stopped operating the vehicle before the full year is up are you owed the unused portion of those taxes.
Who Qualifies For A Credit Or Refund?
If taxes were previously paid during the 2290 tax period, which ends in June, you can claim a refund or credit for any of the following events (as long as they happened in a month other than June):
- A vehicle that was sold or traded in for another vehicle (if you replace the vehicle, the credit often nets out the tax liability for the new vehicle to zero.)
- A vehicle that was destroyed (or so damaged that it wouldn’t be economical to rebuild it)
- A vehicle that was stolen
Once the tax year has ended, you can claim a refund or credit for your full tax payment from the last tax year on:
- The vehicle operated on public roads within the mileage use limit (5,000 miles typically; 7,500 miles for agricultural trucks) for the entire period shown on the top of the Form 2290 you filed. (You can claim this refund the following tax year, unless you filed the vehicle as Suspended, in which case you did not pay taxes in the first place.) This may also apply to a vehicle that was sold, stolen, or destroyed.
What Does Not Qualify for a Claim or Refund
While there are many instances where one would qualify for a refund or credit, there are also quite a few that don’t. To start, you can’t claim a credit, lower tax, exemption, or refund if you filed your Form 2290 at one weight but occasionally operated at a lower weight class. Another situation where you wouldn’t qualify is if you stopped using the vehicle but still own it (unless it was destroyed and not repaired before the tax year ends). If you simply stopped using the truck, you’d only qualify for a credit or refund if the vehicle’s mileage did not exceed the limit; discontinuing use doesn’t necessarily mean you get your money back.
Credit vs. Refund
While they both provide a means of reducing your tax burden, credits and refunds aren’t one and the same. 2290 tax credits can be instantly applied to reduce the taxes owed on the next Form 2290 you file in the same or following tax period. The IRS does not allow for a refund on a Form 2290 meaning your credits cannot exceed your tax liability on the Form 2290. You can still get refund for credits that exceed the tax liability by continuing to apply them on upcoming 2290 returns or filing IRS excise refund claim forms.
How to Claim a Form 2290 Refund or Credit
If the vehicle in question was destroyed, stolen, or sold before June 1st, a credit for the tax paid can be claimed on the next Form 2290 filed or a refund can be claimed on Form 8849 (Claim for Refund of Excise Taxes). The credit will be prorated based on the date the vehicle was stolen, destroyed, or sold, and since the credit is prorated, you don’t have to wait until the tax period ends to claim it.
With suspended vehicle credits, you may claim the entire amount of tax paid in the previous tax year. You can claim a credit or refund for vehicles that were used 5,000 miles or less (7,500 miles or less for agricultural vehicles), but you’ll have to wait for the tax period to end. Once the tax year is complete and you still have not exceeded the Suspended mileage limit, the full tax amount paid in that tax year can be claimed as a refund on Form 8849, or as a credit on any upcoming Form 2290 you file.
For example, say you paid your HVUT Return for the period spanning July 1, 2021 through June 30, 2022. If the vehicle only traveled 3,000 miles during that time, you can claim a credit on Form 2290 (or refund on Form 8849) after June 30, 2022. (It’s important to note that even if you only used the vehicle for a portion of the year, if you exceeded the mileage limit, you will not qualify for a credit or refund.)
How Much Do You Get?
To calculate what you are owed, divide the full year tax for that weight category by 12 and multiply by the number of months remaining in the tax year beginning with the month after the credit event occurred.
For example, if you filed a weight category V (over 75,000 pounds), the full year tax for a non-forestry vehicle is $550 and the monthly equivalent is $550/12 or $45.83 per month. If you sold the vehicle in November, you would count the months between December (the month after you sold the vehicle) and June (the month the tax year ends). That is equal to 7 months times the $45.83 per month, so the credit due you is $320.83. (If this seems complicated, the IRS provides a chart for credits in the From 2290 instructions and any quality e-file provider will calculate that value for you.)
An IRS Allowance That Is Often Missed
If you replace a truck and the former owner paid the HVUT for the year, the IRS allows you to pay one less month of taxes. This sets up a zero-tax return where your tax liability matches your credit. That means if you buy a truck in December from an owner who already paid the taxes, you can claim on the HVUT that you first started operating the truck in January, and therefore owe the 6 remaining months of the tax year rather than 7 months if it were filed as a December vehicle. The return is zero-tax when you replace your former vehicle in December which sets up a 6-month credit (Jan-Jun), which will net the 6-month tax liability (also Jan-Jun) to zero assuming the vehicles were both the same weight.
Claiming a Credit
The easiest way to get your taxes back is to claim a credit and apply them to the next Form 2290 you file (you’ll receive the credit instantly when you e-file). When you claim a credit on your Form 2290, the IRS deducts the credit amount from what you owe reducing your tax liability on that particular 2290 return. If your vehicle meets the requirements for a claim, you can file one by completing line 5 on Form 2290. To do this, you’ll need to know the vehicle’s VIN, its taxable gross weight, how you calculated the credit, and the date of the credit event. In the case that the vehicle was sold, you’ll also need to put down the name and address of the purchaser.
Credits can’t be more than the tax you report in your Form 2290, but if you have an excess in credit, you aren’t out of luck; any excess credit can be claimed on your next Form 2290 or you may request a refund using Form 8849 with Schedule 6. When you e-file, the IRS will provide a Stamped Schedule 1 in minutes and only charge the net tax (reduced by any credits applied) all in good faith. While it’s uncommon, the IRS can decide after you file not to accept a credit, in which case they will send a letter a few weeks later requiring you pay the amount of the credit they rejected, or requesting supporting documentation like a bill of sale.
Claiming a Refund
If you will not be filing another Form 2290 in the future, or if you prefer to receive a check from the IRS for your overpayment, you can file Form 8849, Claim for Refund of Excise Taxes, with an attached Schedule 6 for the money you are owed. Filing this form takes a little more effort since you must calculate the credit correctly and send an explanation and supporting documents (like a copy of a bill of sale showing the date you disposed of the truck). Once the IRS approves the refund, they mail a check to the address they have on file (which could take 6 weeks or longer).
Easily File and Amend Your Form 2290 With i2290
i2290 is your one-stop shop for filing your Heavy Highway Vehicle Use Tax Return. With i2290, you can skip the IRS lines and print your stamped Schedule 1 in a matter of minutes, and if you’re eligible for a credit or refund, we’ve got you covered there, too. Our dedicated support staff is always here to help and answer all of your questions, and if for any reason you aren’t satisfied with our services, we’ll do everything in our power to make it right. Ready to simplify the Form 2290 filing process? Create an account with i2290 today!
Special note: This article is for general purposes, and is not intended to provide, and should not be relied on for tax, legal, investment, or accounting advice. The best way to ensure you’re properly filing for a refund or credit and paying appropriate taxes is by following IRS regulations and consulting with a tax professional.