The IRS has provided extensive guidance (proposed regulations, Revenue Procedure 2023-33 and frequently asked questions) detailing how consumers can transfer electric vehicle credits to dealers for an immediate rebate at the time of purchase.
The transfer option is available for vehicle purchases beginning in 2024. Buyers can transfer both the Section 30D credit for new qualified plug-in electric drive vehicles and the Section 25E credit for previously owned clean vehicles. However, the election is not available for the Section 45W commercial vehicle credit.
Taxpayers transferring credits will receive a rebate from the dealer, and the dealer will be eligible to claim the credit themselves. Buyers must provide the dealer with extensive information, including a taxpayer identification number and attestations of how the vehicle will be used. Dealers must also provide buyers with extensive information on the credit, including the adjusted gross income limits. The Section 30D credit is generally not available for taxpayers with adjusted gross income (AGI) exceeding $150,000 (single), $225,000 (head of household), or $300,000 (joint). The Section 25E credit is generally not available for taxpayers with AGI exceeding $75,000 (single), $112,000 (head of household), or $150,000 (joint).
Taxpayers who transfer the credits but exceed the AGI thresholds when filing their returns will be required to pay back the credit. However, if an eligible taxpayer would not have had enough tax liability to offset the credit when filing the return, neither the dealer not the taxpayer is required to pay back the credit.
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