The Treasury Department and Internal Revenue Service (IRS) released new guidelines on Friday outlining how consumers can access federal tax credits for electric vehicles (EVs) under the Inflation Reduction Act of 2022, in a move aimed at boosting sales of EVs.
The change will allow consumers who purchase EVs to transfer their new clean vehicle credit of up to $7,500 or their previously owned clean vehicle credit of up to $4,000 directly to car dealers beginning Jan. 1.
The move gives buyers an immediate down payment for their EV, instead of waiting to receive the credit on their next year’s tax return.
To qualify, consumers must purchase their EV from a dealer that has registered with a new IRS website, Energy Credits Online. When the buyer transfers the credit, the dealer will then either reduce the vehicle’s price or give them cash in the amount eligible.
Lauren Blatchford, chief implementation officer for the Inflation Reduction Act, said the change will allow consumers to reduce upfront cost for an EV, increase their choices, and help auto dealers expand their businesses.
The Treasury Department noted that it will take public comments and consider those prior to issuing final rules.