Starting January 1, 2024, you can choose to transfer your new clean vehicle credit of up to $7,500 and used clean vehicle credit of up to $4,000 to a car dealer. This means you can effectively lower the purchase price of your new electric vehicle (EV) at the point of sale.

When a buyer chooses to transfer the credit, registered dealers will lower the price or provide cash. The amount provided must equal the full amount of the credit available for the eligible vehicle. 

To transfer the credit, you’ll need to attest that you believe you are eligible, including that you fell below the applicable income thresholds in the prior year or expect to be below these thresholds in the year the vehicle is placed in service. *Keep in mind, you will have to pay back the credit if you don’t OWE taxes. (Very important!)

When completing the sale, the dealer will electronically submit information regarding the transfer, including a time of sale report, to receive an advance payment for the value of the credit. The IRS expects to issue advance payments within 72 hours.

If you exceed the applicable modified adjusted gross income limitation, you’ll need to directly repay the full value of a transferred tax credit to the IRS when filing your taxes. Previously, to claim the credit, you had to file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) with your tax return. 

Go electric ✌️

To learn more about the new EV credit transfer option, visit https://home.treasury.gov/news/press-releases/jy1783