IRS RELEASES INFORMATION REGARDING CLEAN VEHICLE CREDITS:

The IRS has released proposed regulations and other guidance on the clean vehicle tax credit enacted as part of the Inflation Reduction Act that will allow consumers to claim the rebate at the time of purchase.

In proposed regs, unveiled October 6, starting January 2024 qualified taxpayers will be able to transfer the section 30D and section 25E tax credits, worth up to $7,000 for the purchase of a new electric vehicle and $4,500 for a used electric vehicle, respectively, directly to the car dealer at the point of sale.

“For the first time, the Inflation Reduction Act allows consumers to reduce the up-front cost of a clean vehicle, expanding consumer choices and helping car dealers expand 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 the credits they are eligible for,” Laurel Blatchford, chief implementation officer for the Inflation Reduction Act, said in a statement.

The IRS says in Rev. Proc. 2023-33, that consumers looking to take advantage of the credit must attest to being under the eligible income threshold, and car dealers must register under a new website, the “IRS Energy Credits Online Portal,” to take part in the program.

The proposed rules would treat the transfer as being repaid by the consumer to the dealer as part of the purchase price of the vehicle, therefore not affecting the dealer’s tax liability.

The full Fact Sheet is available here.