Beginning January 1, 2024, buyers of vehicles eligible for either the Clean Vehicle Credit (30D) or the Previously-Owned Clean Vehicles Credit (25E) under the Inflation Reduction Act, will be able to transfer the tax credits directly to a registered dealer in exchange for an equivalent reduction in the purchase price of the vehicle. The IRS will then pay the registered dealer electronically, typically within 72 hours, for the transferred clean vehicle tax credits.
IMPORTANT – In order to participate, dealers must register online with the IRS through the IRS Energy Credits Online portal before January 1, 2024. Further, even if a dealer decides not to participate in the tax credit transfer process, dealer online registration will still be required in order for dealers to submit required time-of-sale reports in order for vehicle buyers to claim the tax credit for an eligible vehicle placed in service on or after January 1, 2024. The IRS is encouraging dealers to begin the online registration process immediately in order to avoid any issues that could arise by waiting until closer to the end of the year to register.
Clean Vehicle Tax Credit Resources
The following are multiple resources for dealers on the guidelines for the clean vehicle tax credit transfer process and dealer registration:
IRS Energy Credits Online – Registration portal for sellers of new and previously owned vehicles eligible for federal tax credits. Registration will be required to submit time-of-sale reports and receive payments from the IRS for clean vehicle tax credits.
IRS Energy Credits Online User Guide – Provides step-by-step instructions for dealers registering to use the IRS Energy Credits Online tool.
IRS Video – How dealers and sellers register for Energy Credits Online
IRS Clean Vehicles Credit FAQs – Updated IRS FAQs on the Clean Vehicle Credit. Note, among the FAQS the following: Topic H — Transfer of New Clean Vehicle Credit and Previously-Owned Clean Vehicles Credit, Topic I – Registering a Dealer/Seller: Seller Reporting and Clean Vehicle Tax Credit Transfers and Topic J – Seller Report Information for Buyers of New and Previously-Owned Clean Vehicle Tax Credits Beginning in 2024. Again, as noted above, all dealers must submit seller reports through the IRS Energy Credits Online for vehicles placed in service beginning January 1, 2024.
NADA Clean Vehicle and Refueling Infrastructure Incentives webpage – NADA webpage providing overview of information on the Clean Vehicle Credits.
Department of Treasury Clean Vehicle Tax Credits Update – The Department of Treasury conducted a webinar on November 6th for dealers on the new IRS Energy Credits Online portal and the process for the transfer of tax credits to dealers. The slides from the presentation are available here.
IRS Revenue Procedure 2023-33 – Formal guidance from the IRS on the transfer of Clean Vehicle Credits (Section 30D) and Previously-Owned Clean Vehicles Credits (25E).