IRS Allows Electric Vehicle Buyers to Retroactively Claim Unused Tax Credits | Carscoops

      Numerous electric vehicle (EV) purchasers in the US have been unable to take advantage of the tax credit due to IRS guidelines, but fortunately, a solution has emerged.

      Dealers previously had only three days to inform the IRS about an EV sale to allow customers to claim the tax credit. Now, they're able to submit a sales report for any vehicle sold in 2024 to receive these credits.

      The National Automobile Dealers Association (NADA) urged the IRS to rectify the issues related to the EV tax credit.

      The $7,500 federal EV tax credit has encouraged many Americans to convert to electric vehicles; however, the program hasn't been entirely seamless. Although the credit can now be applied directly at the time of purchase, some dealerships have been slow to adopt the process, leaving customers without the promised discount. The good news is that a resolution is in progress.

      Previously, although the rebate was accessible during the purchase, dealers needed to be registered in the program and use a portal to submit their EV sales report within three days of the sale for the credit to be processed. If they missed this deadline, the rebate would simply disappear.

      Fortunately, the IRS has come to the rescue. The NADA reports that the agency is effectively resetting the three-day reporting rule. Dealers can now submit reports for any qualifying clean vehicle credit transaction from 2024, even if the sale occurred earlier in the year.

      NADA noted that the IRS updated the portal earlier this week, making it fully functional for dealers. This news benefits not only consumers but dealerships as well. Some dealers had initially offered the tax credit upfront to buyers, only to later discover they hadn't actually secured the rebate.

      NADA stated that it “pushed hard for the IRS to address these issues” and even sent a formal letter to both the U.S. Department of Treasury and the IRS, calling for a prompt and effective resolution.

      With the Trump administration planning to impose a 25% tariff on all cars manufactured abroad starting on April 2, the tax credit may now hold greater significance for consumers than ever. These new tariffs are anticipated to increase the prices of both new and used cars, potentially adding thousands to overall costs. For many buyers, that $7,500 credit is about to become considerably more valuable.