The Internal Revenue Service (IRS) has recently opened the doors to its Energy Credits Online Portal Registration, marking a significant milestone for electric vehicle (EV) dealers across the country. This portal is a critical tool for those looking to capitalize on the Clean Vehicle Credit. Dealers should register as soon as possible to receive advance payments that will offset the amount of tax credits that are applied to customers’ purchase prices.
Why Register ASAP?
Registering on the portal is imperative for EV dealers aiming to maximize benefits. As the electric vehicle market continues to expand, so do the opportunities for dealerships to contribute to a greener future while reaping financial rewards. By registering promptly, dealers position themselves to take advantage of the Clean Vehicle Credit, a key incentive to spur the adoption of electric vehicles.
While you could previously only register your business, the IRS has expanded the tool to include time-of-sale reports.
Who Qualifies for the Credit?
While dealers of qualifying electric vehicles, including plug-in electric cars and light trucks, may be eligible for the Clean Vehicle Credit, the big winners are consumers who purchase a new, qualified plug-in electric vehicle (EV) or a fuel cell electric vehicle (FCV). They may be eligible for a tax credit of up to $7,500 under Internal Revenue Code Section 30D. The rules for this credit have been modified by the Inflation Reduction Act of 2022 for vehicles bought between 2023 and 2032.
This credit is open to both individuals and businesses. To qualify, you must ensure that:
- The vehicle is bought for personal use and not for resale.
- The vehicle is primarily used in the United States.
Furthermore, your modified adjusted gross income (AGI) should not surpass the following limits:
- $300,000 for married couples filing jointly.
- $225,000 for heads of households.
- $150,000 for all other filers.
You can determine your modified AGI from the year you acquired the vehicle or the preceding year, whichever is lower. If your modified AGI falls below the specified threshold in either of the two years, you are eligible to claim the credit.
It’s important to note that this credit is nonrefundable, meaning you cannot receive more in credit than what you owe in taxes. Additionally, any excess credit cannot be applied to future tax years.
Information Required for Reporting to the IRS
To successfully claim the Clean Vehicle Credit, dealers must provide specific information during the registration process. The portal requires details on each eligible vehicle, including the make, model, year and vehicle identification number (VIN). Dealers should also be prepared to provide documentation substantiating the eligibility of the vehicles claimed for the credit.
Seize the Opportunity
The opening of the IRS Energy Credits Online Portal for registration is a pivotal moment for EV dealerships nationwide. By promptly registering and ensuring compliance with the Clean Vehicle Credit requirements, dealers can not only contribute to the growth of the electric vehicle market but also benefit from financial incentives. As the automotive industry continues its shift towards sustainability, staying informed and proactive is key for dealers looking to thrive in this evolving landscape.
For more detailed information on the Clean Vehicle Credit and dealer requirements, visit the IRS website.
How Cherry Bekaert Can Help
Cherry Bekaert is here to be your guide forward as more regulations are released. Our trusted Auto Dealers Services team can help you determine how this may impact you and your dealership.
