Oct. 6 (UPI) — The Treasury Department on Friday announced new rules to access tax credits for electric vehicles allowing customers to apply a rebate at the dealership when purchasing a vehicle.
Under the new rule, Americans will be able to transfer a new clean vehicle credit of up to $7,5000 and a previously owned clean vehicle credit of up to $4,000 to the dealer beginning on Jan. 1, 2024.
The Treasury said the rule would “effectively lower the vehicle’s purchase price” by allowing buyers to use the rebates as a down payment, rather than waiting for the compensation after the vehicle has been purchased and they have filed a federal tax return.
“President Biden’s Investing in America agenda is focused on lowering transportation costs for consumers and giving American car companies the tools to lead the market,” said Laurel Blatchford, chief implementation officer for the Inflation Reduction Act, in a statement.
“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.”
The administration built the plan with the help of the Internal Revenue Service to create a stronger incentive for customers to buy electric vehicles without forcing the dealers to bear the brunt of the upfront costs.
Beginning later this month, dealers will be able to register via a new IRS Energy Credits Online website to offer clean energy tax credits for select EVs.
Then in January, they will be able to submit sales information to the IRS to receive payment for the credits.
“Payment of the value of the transferred credit by the dealer to the consumer would be treated as repaid by the consumer to the dealer as part of the purchase price of the vehicle, and therefore be treated as an amount realized by the dealer,” the Treasury said.
