A few weeks ago our friends at NADA reported that the IRS expects to reimburse dealers who transfer advance payments for clean vehicle tax credits “on the hood” within 72 hours of submission via electronic payment. Additionally, Treasury said that consumers – as opposed to dealers – will be responsible for attesting to their income for the purpose of determining eligibility for clean vehicle tax credits.
These are positive developments and aligned with two major priorities that NADA stressed to Treasury would be needed for successful implementation of the clean vehicle tax credit program in the showroom. The information Treasury released Friday should allay the biggest dealer concerns with their role in facilitating advanced clean vehicle tax credits to consumers at the point of sale starting in January 2024.
The information regarding the EV tax credit advance payments was part of an announcement Friday from the Treasury Department which is available here. The announcement contained other information regarding the implementation of the EV tax credits; for instance, details about how dealers will register with the IRS via the portal.
WANADA & NADA will be communicating regarding the full announcement in the near future. We will also continue to engage with Treasury regularly as the regulations are completed and Treasury releases additional information related to the clean vehicle tax credit program.
You may also be interested in the FAQ below, which Treasury posted for dealers’ information:
May a buyer claim the new or previously-owned clean vehicle tax credits if the dealer or seller of the vehicle is not registered with the IRS?
No. Starting for vehicles placed in service January 1, 2024 or later, buyers will only be able to claim credits if the seller has registered with the IRS and successfully submits a seller report through the IRS Energy Credits Online. This submission is done at the time of sale through IRS Energy Credits Online, and the seller must provide a copy of the successfully submitted seller report to the buyer.
What information is required for dealer registration?
Dealers should be prepared to create an account using general Business information (including Business EIN, Address, Phone Number, and Email) and authorize an individual to access dealer registration.
Dealers registering for advance payments will have to provide additional information, detailed on IRS Energy Credits Online.
What is the difference between registering for seller reporting and the advance payment program?
A registration to submit seller reports will allow dealers and sellers the ability to submit seller reports through IRS Energy Credits Online when selling eligible vehicles. This does not include the ability to receive advance payments. A registration for the advance payment program grants the dealer the ability to submit seller reports when selling a vehicle and submit a request for an advance payment to the IRS. Only licensed dealers may register to receive advance payments.
Once a dealer is registered, when can they start to receiving advance payments?
Buyers may transfer their credit to the dealer, thereby allowing dealers to initiate an advance payment request, beginning January 1, 2024.
Can a dealer come back into IRS Clean Energy Online and complete its advance payment registration at another time?
Yes. A dealer who is registered to submit seller reports will have the ability to continue their registration to receive advance payments at any time.
Is dealer registration separate for used and new vehicle sales?
No. Registered dealers may submit seller reports for both new and previously-owned clean vehicle sales. Please note, only licensed dealers may submit seller reports for previously-owned clean vehicles.
Why did my dealership receive a tax compliance error?
A tax compliance error is a result of an overdue tax return or unpaid federal tax debt. If you receive this error, call 877-968-3413 for more information.
What does my dealership need to do to be in tax compliance? What if my dealership is not in tax compliance? How can my dealership become compliant to participate in the advance payment program?
Dealer tax compliance means that all required Federal information and tax returns of the dealer have been filed, including for Federal income and employment tax purposes, and all Federal tax, penalties, and interest due of the dealer as of the time of sale have been paid. A dealer that has entered into an installment agreement with the IRS for which a dealer is current on its obligations is treated as being in dealer tax compliance.Download Bulletin PDF