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How to Get the Federal Clean Vehicle Tax Credit This Year

Posted 01/11/2024

The United States federal government has made it even easier to buy a new or used electric vehicle (EV). The latest Clean Vehicle Tax Credits can be applied to the purchase of a new or used EV at the point of sale as of January 1, 2024.  The Clean Vehicle Tax Credit for new EVs is worth up to $7,500 and the Previously Owned Clean Vehicle Tax Credit is worth up to $4,000. And since you can now transfer those credits to the dealership when buying your EV, the credits can effectively lower the sticker price of the vehicle by acting as a down payment. Here’s what you need to know.

How to Claim the Clean Vehicle Tax Credits at Point of Sale 

According to the Internal Revenue Service (IRS), EV buyers will need to transfer their eligible tax credits to authorized automotive dealerships at the time of purchase. This allows consumers to immediately get up to $7,500 off their new EV, rather than waiting for tax season.  How this works: the automotive dealer will provide a credit to the buyer at the time of purchase which will act as a down payment or a partial payment for the EV. Then, when the dealer reports the purchase to the IRS, they are reimbursed by the federal government. Dealerships can become authorized for accepting tax credit transfers by registering with the IRS Energy Credits Online Portal

Information You Must Provide to Your Authorized Dealership 

If an EV buyer wants to transfer their eligible federal tax credit to the automotive dealer for purchasing an EV, they must provide the dealership with the following:

  • The date of the transfer 

  • Their Tax Identification Number 

  • A photocopy of their valid, government-issued photo identification 

  • Seven attestations to your income and vehicle usage 

Here are the seven attestations that you must provide: 

  • Your modified Adjusted Gross Income (AGI) in the prior or current year did not exceed: 

    • For new EVs: 

      • $300,000 for married couples filing taxes jointly 

      • $225,000 for heads of households 

      • $150,000 for all other filers 

    • For used EVs: 

      • $150,000 for married people filing jointly, or a surviving spouse 

      • $112,500 for heads of households 

      • $75,000 for all other tax filers 

  • New EV buyers: the vehicle will be only for personal use 

  • Used EV buyers: you are a “qualified buyer” as defined by the IRS: 

    • Have bought the used EV for yourself, not for resale 

    • Not be the original owner of the EV 

    • Not be claimed as a dependent on another person’s tax return 

    • Not have claimed another used Clean Vehicle Credit in the three years prior to the purchase date 

  • You will file an income tax return for the year in which the vehicle is placed in service on or before the due date of the tax return. This return must report the buyer’s eligibility for claiming and transferring credit, vehicle identification number (VIN), and authorization of the tax credit transfer to the dealership. You must also attest that you will repay any credit amounts “subject to recapture,” if applicable. 

  • You are making the transfer prior to placing the EV in service and have made no more than two transfers during the taxable year (including the current attestation). 

  • You will repay any amount you were not actually eligible for if your modified AGI exceeds the aforementioned limitations.

  • Your transfer was done voluntarily.  

Your Automotive Dealership Must Also Meet These Criteria 

In order to make the credit transfer, your auto dealership must be registered with the IRS via the Energy Credits Online Portal.   Before the tax credit is transferred, and at the time of sale, your dealer must disclose the following information:  

  • The manufacturer's suggested retail price. 

  • The value of the tax credit allowed and any other purchase incentives. 

  • The amount of the credit transfer that the dealer will provide to you. 

The dealer, at the time of sale, must have paid the taxpayer a cash payment or a credit to act as a partial or down payment on the EV that is equal to the tax credit that they are eligible for.   Sellers and dealers are required to report clean vehicle credit information to the IRS. If you buy a new or used electric vehicle from an ineligible seller, you may not be able to access the EV tax credits.   

Can I Combine the EV Tax Credit With Other EV Incentives? 

While the clean vehicle tax credits are good news for EV drivers, the best news is that using and transferring these tax credits does not interfere with other EV incentives. You may still negotiate the price of the vehicle, claim local incentives (where available), or take advantage of manufacturer discounts. You may also qualify for tax credits, rebates, or incentives for installing an EV charging station at your home.

Residential EV Charging Grants and Incentives

There are local, state, and federal rebates and incentives available for residential EV charging at qualifying locations across the United States.

Search for Incentives

 

How to Charge Your New EV at Home 

Your new EV will likely come with a Level 1, or trickle charger, which you can plug into a regular 120 volt wall outlet. It will provide a small amount of power to your vehicle and charge it in around 12+ hours. While a Level 1 charging cable can meet the needs of a plug-in hybrid electric vehicle (PHEV) driver, it typically is not enough for the daily needs of a battery electric vehicle (BEV) driver.  [caption id="attachment_8948" align="alignright" width="300"] Blink HQ 200[/caption] Want to be able to fully charge your EV overnight? Consider installing a Level 2 home charger, such as the Blink HQ 200. This 50amp charger uses 240 volts of electricity, similar to a dryer or other large appliance, and you can plug it in to a NEMA 14-50 plug or hardwire into your electrical system. Visit the Blink Charging Time Calculator to estimate charging times by charging power or vehicle make and model.  

Conclusion 

The EV landscape is rapidly changing, but benefiting from a Used or New Clean Vehicle Credit at the point of sale is yet another way that the US federal government is encouraging EV adoption. For additional information about tax credits, ask a trusted tax professional or visit the IRS Clean Vehicle Credits page to learn about the current EV tax credits, previous versions, used EVs, commercial EVs, and all other requirements. You will need Form 8936 to claim your credit. Ready to charge? Download the Blink Mobile App to find a charging station near you.  

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