EV Credit Transfer Process Detailed in New Treasury Guidance

The Treasury Department on Friday released guidance specifying how eligible clean vehicle buyers can transfer the full value of the credits starting next year, regardless of individual tax liability.

Electric vehicle buyers can transfer their clean vehicle credits to registered dealers under the Inflation Reduction Act from Jan 1, 2024. The tax credits are up to $7,500 for new EV purchases and up to $4,000 for pre-owned clean vehicle purchases. The transfers let buyers realize the savings at the point of sale, instead of waiting until filing tax returns the following year.

• Treasury said it would launch its new IRS Energy Credits Online website later this month where dealers can register credits. Registered dealers can begin submitting clean vehicle sales information and receive payments for credits promptly.
• The guidance also clarified that buyers can claim the credits if they attest that they believe they’re eligible and fall under income thresholds either the previous year or in the year the vehicle is put into service.
• Buyers will have to repay the full value of the credit to the IRS when filing their taxes if they end up exceeding the income limit.