The US Treasury issued updated guidance today on the process for electric vehicle buyers to receive the EV tax credit, and rather than waiting to receive the funds after filing annual tax returns, buyers will be able to get it at the dealer when purchasing the vehicle—up to $7,500 for a new EV and $4,000 for a used one, effective Jan. 1, 2024.
"[This] will lower costs for consumers and help car dealers grow their businesses by increasing access to Inflation Reduction Act credits at point of sale for new and previously owned clean vehicles," Treasury says. "Researchers have found that consumers overwhelmingly prefer an immediate rebate at point of sale."
Dealers must register on a new website, called IRS Energy Credits Online. Then, they issue the funds to buyers as a discount and the IRS will reimburse the dealer within 48-72 hours. To combat fraud and protect buyers, Treasury says dealers must provide buyers "confirmation of vehicle qualification" at the time of purchase.
"The IRS has focused on streamlining this process for car dealers as part of its commitment to improving service and helping taxpayers claim the credits they are eligible for," says Laurel Blatchford, Chief Implementation Officer for the Inflation Reduction Act.
Keep in mind, not every EV qualifies for the credit. The full list includes just a handful of vehicles, but they are some of the most popular EVs from Ford, Rivian, Tesla, and others. Potential buyers are now advised to cross-reference that list with the list of EVs that will be able to charge at Tesla Superchargers, which will help consumers get even more value out of vehicles from multiple brands (and not just Tesla).
A buyer must make less than the annual prescribed income caps to be eligible as well: under $300,000 for married or joint filers, under $225,000 for head-of-household filers, and under $150,000 for all other taxpayers.