How Clean Vehicle Credits Can Help Buyers Pay Less at Dealerships

Starting from January 1, 2024, taxpayers who purchase an eligible new or used clean vehicle will have the opportunity to transfer their tax credits to the dealer. This exchange can provide a financial advantage, such as a lower price.

The Benefits of Transferring the Credit

Taxpayers can now claim tax credits for new and used clean vehicles purchased during the tax year. From January 1, 2024, they can transfer this credit to the dealer. This means that the taxpayer buying the vehicle can exchange their credit for a financial benefit, such as a reduced final cost. The financial benefit is equal to the credit amount, whether in cash, a partial payment, or an advance.

New Information about the Clean Vehicle Credit

The IRS recently published proposed regulations, Tax Procedure 2023-33, and frequently asked questions that cover:

– How taxpayers can transfer clean vehicle credits to eligible dealers
– How dealers can register with the IRS’s Energy Use Credits tool to receive advance payments
– How dealers can lose their registration if they do not meet the program’s requirements
– New details about the timing and delivery of the seller’s reports
– Updated information for manufacturers on how they can be eligible and how eligible manufacturers can deliver monthly reports

Dealers and sellers must register by December 1. Dealers and sellers of clean vehicles should immediately register their organizations using the Energy Use Credits tool. The IRS strongly urges clean vehicle sellers to register by December 1, 2023, to receive advance payments starting January 1, 2024.

For updated frequently asked questions about clean vehicle credits related to eligible new, used, and commercial use clean vehicles, see Fact Sheet 2023-22.