The IRS has revised its FAQs that provide guidance to taxpayers seeking to claim tax credits for new or previously owned clean vehicles. (IR 2024-111; Fact Sheet 2024-14, 4/16/2024)
The Inflation Reduction Act of 2022 made changes to tax credits for clean vehicles, including revisions to the credit for qualified plug-in electric drive motor vehicles and the addition of a credit for fuel cell vehicles under Code Sec. 30D. The IRA also established new credits for previously owned clean vehicles under Code Sec. 25E and for commercial clean vehicles under Code Sec. 45W.
The IRS’ updated FAQs include minor changes regarding a form name, the timing and method for sellers to submit reports to the IRS, and sample dealer disclosures.
Taxpayer form. The IRS has updated the name of the form on which taxpayers must report their vehicle identification number (VIN) to claim the new clean vehicle credit. New clean vehicle VINs should be reported on Form 8936, Clean Vehicle Credits. (Topic A, Question 10)
Seller reports. Sellers must provide new clean vehicle purchasers and the IRS with a report containing specified information for the purchaser to be eligible for a new clean vehicle credit. The IRS has updated its guidance to sellers on the timing for providing these reports to the IRS. Reports for vehicle sales occurring in calendar year 2023 were due by February 15, 2024, by fax. Reports for vehicle sales in calendar year 2024 and later must be filed within three days of the sale through IRS Energy Credits Online. More information is available in Rev Proc 2022-42, Rev Proc 2023-33, and Rev Proc 2024-12. (Topic B, Question 11)
Dealer disclosures. The IRS removed language about its plans to publish two sample written disclosures for registered dealers to provide to buyers.
Dealers must provide disclosures containing the MSRP of the new clean vehicle or the sale price of the previously owned clean vehicle, the maximum amount of the credit allowable and any other incentive available for the purchase of such vehicle, the amount provided by the dealer to the buyer as a condition of making the transfer election, and the modified AGI limitations in Code Sec. 30D(f)(10) (new clean vehicles) or Code Sec. 25E(b)(2) (previously owned clean vehicles). For sales of previously owned clean vehicles, disclosures also must make certifications about the vehicle’s model year and that the transfer is the first since August 16, 2022, to a person other than the original user. (Topic H, Question 5)
Dealers also must provide disclosures to buyers about applicable income limits, and buyers then must attest that they expect to qualify for the credit. (Topic H, Question 15)
The FAQs supersede earlier FAQs last updated in December 2023 by Fact Sheet 2023-29.
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