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Truck Driver Tax Credit

Written by Nick Webster

Published on Feb. 9, 2024, 4:12 a.m.


There is a Truck Driver Tax Credit. Legislation that has been reintroduced in the U.S. House of Representatives. Reps. Mike Gallagher (R-Wisconsin) and Abigail Spanberger (D-Virginia) have reintroduced their bipartisan legislation to create a refundable income tax credit for qualified commercial drivers. Know about the DOT Authority Package. This measure, the Strengthening Supply Chains Through Truck Driver Incentives Act, is designed to provide short-term incentives to encourage new drivers to join the workforce and retain existing ones. Both legislators believe this would help strengthen supply chains in the long run.

The bill is one of several efforts by both parties to address the nationwide driver shortage, leading to rising freight costs and shortages of essential supplies—truckers Tax. The bipartisan legislation hopes to provide financial incentives to make truck driving an attractive profession for potential job seekers.

What Specific Tax Credit Would Truck Drivers Receive?

This proposed bill would provide a refundable tax credit of up to $7,500 for truck drivers with a valid Class A CDL who drive at least 1,900 hours in the year. Do you plan on starting a trucking company? This tax credit would be available for two years (2023 and 2024). Additionally, new truck drivers or individuals enrolled in a registered trucking apprenticeship could receive a refundable tax credit of up to $10,000 over the same two-year period. Want to know about the Motor Carrier Authority? The eligibility requirements for this credit allow new truck drivers to qualify even if they did not drive a commercial truck in the previous year or have driven less than 1,420 hours during the current year.

Multiple organizations, including the American Trucking Association, American Loggers Council, National Grocers Association, International Foodservice Distributors Association, American Building Materials Alliance, Forest Resources Association, Hardwood Federation, Wood Machinery Manufacturers of America, Third Way and National Pork Producers Council, have embraced Gallagher’s and Spanberger’s proposed bill. These groups have shown their support for this legislation, which promises to bring positive change.

What Is the SHIP IT Act?

Representatives Dusty Johnson (R-South Dakota) and Jim Costa (D-California) recently proposed the SHIP IT Act, which includes a temporary tax credit of up to $7,500 for eligible truck drivers. IRP IFTA FMCSA Corporation Tax Insurance BOC. The eligibility is based on an individual's adjusted gross income in a taxable year; couples filing jointly can earn up to $135,000, heads of households can make up to $112,500, and individuals can make no more than $90,000. New truck drivers would be eligible for an even larger credit of up to $10,000. This legislation looks to improve the industry by offering financial incentives that could potentially lure more people into the field.

Is the Government Serious About Taking Trucker Requests Seriously?

The trucking industry has been vocal about its need for improved parking, which is why this new bill comes as a breath of fresh air. CT Highway Use Tax. It authorizes grants to states and private agencies, giving them the resources necessary to expand and improve truck parking across the country.

It ties with driver compensation at number one on the American Transportation Research Institute’s (ATRI) Top Trucking Industry Issues (TII) report - illustrating how important this issue is to the trucking industry. Do you want to know what are Driver Qualification Files? This bill will go a long way in helping address this concern and ensuring that drivers have access to safe and convenient parking spaces when they need them.

If you've previously held a commercial driver's license (CDL), but it has since expired, the proposed bill could provide New York Highway Use Tax. Incentives for you to renew it and start driving again. It seeks to streamline the process of obtaining CDLs, eliminating the common obstacles states and third parties often face when administering tests. This simplification could make it easier for drivers to return to the road quickly and safely.

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What Does the Truck Driver Tax Credit Mean for Businesses?

The recently proposed bill incentivizes truckers to maintain their careers and provides additional motivation for those seeking a CDL license. As the number of available driver jobs is expected to rise with the new tax credit in effect, your business may see an influx of applicants for open positions. Ultimately, these tax credits will help support the supply chain and the dedicated drivers that keep it running smoothly.

Read Below To Learn About Current Tax Credits for Truck Drivers

Below is some crucial information about current tax credits that can apply to truck drivers. In the trucking industry, understanding tax obligations and potential credits is crucial. For truck drivers, there are several tax credits available that can significantly reduce your tax liability. Want to know The Basics of Farm Exemptions? This comprehensive guide explores the truck driver tax credits concept, providing valuable insights to help you navigate your tax obligations effectively.

I. Understanding Tax Credits

Before delving into specific tax credits for truck drivers, it's essential to understand what tax credits are. Unlike tax deductions, which reduce your taxable income, tax credits directly decrease your tax bill, dollar-for-dollar. They're essentially a sum of money that taxpayers can offset against their tax due, making them valuable tools for reducing overall tax liability.

II. Per Diem Tax Deduction

One key tax benefit for truck drivers is the Per Diem deduction, which allows drivers to deduct meals and incidental expenses while on the road. Though not a tax credit, this deduction can substantially reduce your taxable income. Visit & learn about the DOT Compliant Drug & Alcohol Program. The IRS provides standard rates for these deductions, but keeping detailed records of your trips, including dates, locations, and receipts, is crucial.

III. Fuel Tax Credits

Fuel tax credits are available to truck drivers who use fuel for off-road business purposes, such as refrigerating goods. Know How to Obtain your MC (Motor Carrier Number). This credit can be claimed by filing Form 4136, "Credit for Federal Tax Paid on Fuels." The IRS publishes a list of fuels and their credit amounts, so checking this list and keeping accurate records of your fuel purchases is essential.

IV. The Work Opportunity Tax Credit (WOTC)

The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from certain target groups, including veterans and individuals on government assistance. If you're a truck driver and own a business, you could claim this credit if you hire eligible employees.

V. The Disabled Access Credit

If you're a truck driver with a disability or own a trucking business that accommodates disabled employees, you may qualify for the Disabled Access Credit. Fuel Tax Reporting. This tax credit is available to businesses that incur expenses for providing access to persons with disabilities. It provides a non-refundable credit for small businesses that incur expenditures to provide access to persons with disabilities.

VI. Energy-Efficient Vehicle Credit

Suppose you use an alternative fuel or electric truck for your operations. In that case, you might qualify for the Alternative Motor Vehicle Credit or the Qualified Plug-in Electric Drive Motor Vehicle Credit. These credits are part of the government's initiative to promote the use of energy-efficient vehicles and can offset a portion of the cost of such vehicles.

VII. Tips for Claiming Tax Credits

While these tax credits and deductions can provide substantial savings, it's essential to understand how to claim them effectively. Here are some tips to help you navigate the process:

  • Keep Detailed Records: For fuel purchases, meals, or vehicle purchases, keeping detailed records is crucial for claiming tax credits. This includes saving all receipts and maintaining logs of your trips.
  • Consult a Tax Professional: Tax laws can be complex and confusing. It's always a good idea to consult with a tax professional who understands the trucking industry and can provide tailored advice.
  • Stay Updated: Tax laws and credits can change from year to year. Stay updated on the latest tax laws and regulations to maximize your potential credits.

VIII. Other Deductible Expenses

Aside from the tax credits and deductions mentioned, truck drivers may also be able to deduct certain business-related expenses. These can include:

  • Maintenance and Repairs: The costs of maintaining and repairing your truck can be deducted as business expenses.
  • Supplies and Equipment: Any supplies or equipment necessary for your work as a truck driver, such as logbooks, maps, gloves, or a GPS, can typically be deducted.
  • Depreciation: If you own your truck, you may be able to claim depreciation, which can significantly lower your tax bill.

IX. Understanding Tax Forms

Understanding the various tax forms is also crucial. For instance, Form 4136 is used for claiming fuel tax credits, Form 8826 for the Disabled Access Credit, and Form 5884 for the Work Opportunity Tax Credit. A tax professional can help you understand the necessary forms for your situation.

X. Avoiding Common Pitfalls

When claiming tax credits, it's essential to avoid common pitfalls, such as inaccurately reporting income or expenses, not keeping thorough records, or not seeking professional advice. There are many benefits related to forming a limited liability company. These mistakes can lead to an audit, fines, or missed opportunities for tax savings.

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Understanding and effectively utilizing tax credits can result in significant savings for truck drivers. Click here to discover the Texas DOT Number. Whether it's the Per Diem deduction, fuel tax credits, or credits for hiring certain groups, you can reduce your tax liability. Remember, thorough record-keeping, consulting with a tax professional, and staying updated on tax laws can help you navigate your tax obligations effectively. Want to know about Trucking Operating Packages? While taxes can seem daunting and complex, a well-informed approach can simplify the process and ensure you're benefiting from all the tax credits available to you.

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