Car dealerships across the United States have been granted the opportunity to participate in a groundbreaking program designed to streamline electric vehicle (EV) tax credits. Launched jointly by the U.S. Department of the Treasury and the Internal Revenue Service (IRS), this initiative aims to make EV purchases more accessible for consumers starting next year.
Under this program, consumers can expeditiously transfer the $7,500 EV tax credit for new vehicle acquisitions or the $4,000 tax credit for eligible used EV purchases to the dealer at the time of sale. This innovative approach effectively reduces the upfront cost of these vehicles, eliminating the need for buyers to wait until their next tax return to claim the credit.
Dealers can opt into the program by registering through the IRS Energy Credits Online portal. Extensive research conducted by the U.S. Department of the Treasury indicates a strong preference among consumers for immediate rebates at the point of sale, aligning with the core objective of this program.
The online portal will facilitate dealers in submitting clean vehicle sales data to the IRS, enabling them to receive payments for the transferred tax credits. This transformative scheme is scheduled to commence on January 1, 2024, with dealers expected to receive payments within 72 hours of information submission for the credit transfer. Dealers are obligated to either reduce the vehicle's purchase price by the full amount of the tax credit or provide cash equivalent to the buyer.
Laurel Blatchford, Chief Implementation Officer of the Inflation Reduction Act, expressed, “For the first time, the Inflation Reduction Act allows consumers to reduce the up-front cost of a clean vehicle, expanding consumer choice and helping car dealers grow their businesses. The IRS has focused on streamlining this process for car dealers as part of its commitment to improving service and helping taxpayers claim credits they are eligible for. With the opening of Energy Credits Online, Treasury is ramping up its outreach to car dealers to ensure they are aware of this new opportunity to bring in new customers.”