Car dealerships across the United States can now register to receive direct payments for transferred electric vehicle tax credits available to new and used car buyers from next year.
The new program from the U.S. Department of the Treasury and the Internal Revenue Service will allow consumers to immediately transfer the $7,500 EV tax credit for a new vehicle purchase to the dealer or the $4,000 tax credit if they purchase an eligible used EV. This provision in the Inflation Reduction Act effectively lowers the vehicle’s purchase price at the point of sale and means buyers won’t have to wait to claim the credit on their next tax return.
Read: American Buyers Can Now Get Up To $4,000 Used EV Credit, Here’s How
Dealers can register for the program through the IRS Energy Credits Online portal. The U.S. Department of the Treasury says that researchers have found consumers overwhelmingly prefer an immediate rebate at the point of sale and that is exactly what this new program provides.
The online portal will allow dealers to submit clean vehicle sales information to the IRS and then receive payment for the transferred credits. The scheme will start on January 1, 2024, and dealers should receive payments within 72 hours of submitting information for the transfer. Dealers must reduce the purchase price of the vehicle or provide cash to the buyer equal to the full amount of the tax credit.
“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 Inflation Reduction Act’s chief implementation officer Laurel Blatchford said in a statement. “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.”
