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Tax service fixes issue with electric vehicle tax credit, allowing applications with enhanced action
- Previously, dealers were given only 3 days to report the sale of an electric vehicle to the IRS to receive the tax credit.
- Now dealers can report the sale of any vehicle sold in 2024.
- The National Automobile Dealers Association helped initiate this change.
The federal tax credit of $7,500 has encouraged many to purchase a new electric vehicle, but the program has not worked perfectly. While the credit can now be applied directly at the time of sale, some dealerships did not submit credit applications on time, leaving many buyers without a discount. Fortunately, there is now a solution to this problem.
It turned out that although the rebate is available at the time of purchase, dealers must be enrolled in the program and use the portal to report their electric vehicle sale within 3 days of sale for the credit to be applied. If they did not do this, buyers were left without compensation.
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Fortunately, the IRS has come up with a solution. According to the National Automobile Dealers Association (NADA), the IRS is effectively waiving this three-day requirement, meaning dealers can report sales for any transaction to receive the clean vehicle credit that occurred in 2024.
According to NADA, the IRS updated the portal earlier this week, and it is now ready for use by dealers. The update is not only good news for buyers but also for dealers. You see, some dealerships provided the tax credit upfront at the time of sale, not securing the discount for themselves.
NADA says they “strongly advocated for the IRS to fix these issues” and sent a letter to the U.S. Department of Treasury and the IRS requesting timely correction.
With the Trump administration set to escalate foreign production next week, the tax credit is now possibly more valuable than ever before. Due to widespread tariffs, prices of new and used cars are likely to rise by thousands of dollars across the country.
