As a heavy highway vehicle owner, you are required to file Form 2290 annually with the IRS and pay a tax based on the weight of your vehicle. However, certain situations could arise where your vehicle is temporarily not in use or out of service, resulting in a suspension of your Form 2290 tax liability. In this blog, we’ll discuss what suspended vehicles are and how to handle them when filing Form 2290.
A suspended vehicle is one that is not expected to travel more than 5,000 miles during the tax year (July 1 - June 30 for most vehicles) for which Form 2290 is filed. These vehicles are also referred to as "low mileage vehicles" or "taxable vehicles with low mileage."
When a vehicle is suspended, the owner is not required to pay the full Form 2290 tax amount, but instead, they must file Form 2290 with the IRS and indicate that the vehicle is suspended. By doing this, the vehicle owner can avoid paying the full amount of the tax, and instead, will only be required to pay a minimal fee to the IRS.
When filing Form 2290 for a suspended vehicle, you must meet certain requirements and follow specific steps to avoid any penalties or issues with the IRS. Here are the steps to follow when filing for suspended vehicles:
To qualify for suspension, your vehicle must not expect to travel more than 5,000 miles during the tax year, and it must not be used for hire or for the transportation of hazardous materials.
You are still required to file Form 2290 by the deadline of August 31, even if your vehicle qualifies for suspension. This is because the IRS still needs to keep track of your vehicle and your tax liability for the tax year.
When you file Form 2290, you will indicate that your vehicle is suspended by entering the VIN number and selecting the "category of use" as "suspended." You will also need to provide the first-used month and year of the vehicle.
Although you are not required to pay the full tax amount for a suspended vehicle, you will still need to pay a minimal fee to the IRS. This fee is currently $5 per suspended vehicle and must be paid when filing Form 2290.
Knowing how to handle suspended vehicles when filing Form 2290 is essential for any heavy highway vehicle owner. By following the steps above, you can ensure that you are properly handling your suspended vehicles and avoiding any penalties or issues with the IRS. If you have any questions or concerns about filing for suspended vehicles, it is recommended to consult a tax professional who can guide you through the process.