Registration Open For Car Dealers To Get Tax Credit For Clean Vehicles
The Internal Revenue Service has opened registration for car dealers to register for the IRS Energy Credits Online portal.
This is a key step in implementing a provision of the Inflation Reduction Act that will lower costs for consumers and help car dealers grow their businesses by increasing access to tax credits at point of sale for new and previously owned clean vehicles.
The IRS’s new Energy Credits Online tool will allow dealers and sellers of clean vehicles to complete the entire process online and receive advance payments within 72 hours. The tool will generate a Time of Sale report that the taxpayer will use when filing their federal tax return to claim or report the credit.
“This special online tool is designed to help dealers and sellers navigate this important new Clean Vehicle Credit and help taxpayers at tax time,” said IRS Commissioner Danny Werfel. “Online tools like this are part of the larger effort taking place at the IRS with Inflation Reduction Act funding to make improvements and better serve both taxpayers and businesses.”
Beginning in 2024, clean vehicle sellers and licensed dealers must use the tool for their customers to successfully claim or transfer the new or previously owned clean vehicle credit for vehicles placed in service on 2024 January 1 or later.
Researchers have found that consumers overwhelmingly prefer an immediate rebate at point of sale. Starting January 1, 2024, consumers will be able to choose to transfer their new clean vehicle credit of up to $7,500 and their previously owned clean vehicle credit of up to $4,000 to a registered car dealer.
The Department of the Treasury said this provision of the Inflation Reduction Act will effectively lower the vehicle’s purchase price by providing consumers with an upfront down payment on their clean vehicle at the point of sale, rather than having to wait to claim their credit on their tax return the next year. Only vehicles purchased under the consumer clean vehicle credits are eligible for this benefit.
The new Energy Credits Online portal will allow registered dealers to submit clean vehicle sales information to the IRS and promptly receive payment for transferred credits. Dealers will also use Energy Credits Online to submit “time of sale” reports, which will confirm vehicles’ eligibility for a credit, whether or not the buyer chooses to transfer the credit to the dealer.
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