Advance Payment Details
The Treasury and the Internal Revenue Service (IRS) opened an onlineportal on November 1, 2023, to allow Dealers and sellers of clean vehiclesto register for time-of-sale reporting and Dealer advance payments for theClean Vehicle Credit under the Inflation Reduction Act (IRA) for salesoccurring on or after January 1, 2024.
Beginning on January 1, 2024, buyers of qualified electric vehicles will beable to transfer Section 30D Clean Vehicle Credits to Dealers at the timeof sale in return for a payment in cash or in the form of a down paymentequal to the full tax credit amount. Dealers will be reimbursed for thispayment by the IRS, which is expected within 3 days of the sale. Toparticipate in this program, a dealer will first need to register to becomean eligible entity that can participate in the advance payment program.
Registration
Dealers and sellers of qualified electric vehicles can now register theirbusinesses through a new IRS online portal. Two registration processes are available. The first registration will allow Dealers the ability to submit seller reports through the IRS portal when selling eligible electric vehicles. The second registration will allow Dealers to participate in the advancepayment program for credit transfers beginning on January 1, 2024.
Beginning on January 1, 2024, all Dealers submitting seller reports for Clean Vehicle Credits must do so through the new IRS portal. Buyers ofqualified electric vehicles will only be able to claim a Clean Vehicle Credit if a Dealer has registered its business with the IRS and has successfully submitted a seller report through the portal.
You should consult with your own tax or legal professional for more details and to determine whether this program is right for you. This informationdoes not constitute tax or legal advice.
DPES Enrollment
Dealers that wish to have the Federal EV Tax Credit integrated into theireCommerce experience will need to enroll in DPES program "1/1/24 IRA Tax Credit" after completing their IRS Advance Payment Registration.
With the launch of the Clean Vehicle Credit Advance Payment IRSRegistration Portal, Dealers will soon have the ability to have the Section 30D Federal EV Tax Credit included in their eCommerce experience.
To have the Federal EV Tax Credit integrated into your dealership's eCommerce pricing, you must complete the following steps:
- Register with the IRS to accept Clean Vehicle Advance Payments at IRS Energy Credits Online.
- Enroll in DPES program "1/1/24 IRA Tax Credit" using the Dealer Registration ID provided by the IRS in the IRS Energy Credits Online Portal after completing Step 1
Both steps 1 and 2 above are option, but Dealers thatcomplete both steps 1 and 2 above will see the eCommerce experience update sometime in2024 highlighting the impact of the Federal Tax Credit within vehicle pricing.
You should consult with your own tax or legal professional for more details and to determine whether this program is right for you. This information does not constitute tax or legal advice.
Customer Eligibility
Customers may qualify for a credit up to $7,500 under Internal RevenueCode Section 30D if they buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
The credit is available to individuals and their businesses
To qualify, they must:
- Buy it for their own use, not for resale
- Use it primarily in the U.S.
In addition, their modified adjusted gross income (AGI) may not exceed:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
Customers can use their modified AGI from the year they take delivery of their vehicle or the year before, whichever is less. If their modified AGI is below the threshold in one of the two years, they can claim the credit.
The credit is nonrefundable, so they can't get back more on the credit than they own in taxes. They can't apply any excess credit to future tax years.
For additional information, go to the IRS websit
Vehicle Eligibility
To qualify, a vehicle must:
- Have a battery capacity of at least 7 kilowatt hours
- Have a gross vehicle weight rating of less than 14,000 pounds
- Be made by a qualified manufacturer
- FCVs do not need to be made be a qualified manufacturer to be eligible. Check federal guidelines for more details
- Undergo final assembly in North America
- Meet critical mineral and battery component requirements
The sale qualifies only if:
- Customers buy the vehicle new
- The seller reports required information to the customer at the time ofsale and to the IRS.
- Sellers are required to report customer name and taxpayer identification number to the IRS for you to be eligible to claim the credit.
In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed:
- $80,000 for vans, sport utility vehicles, and pickup trucks
- $55,000 for other vehicles
MSRP is the retail price of the automobile suggested by the manufacturer,including manufacturer installed options, accessories, and trim, but excluding destination fees. It isn't necessarily the price the customer pay
For additional information, go to the IRS website.
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Koons Ford Of Annapolis
2540 Riva Road
Annapolis, MD 21401
- Sales: (443) 214-2905
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