.png)
EV Update: IRS Temporary Relief for Clean Vehicle Tax Credit Reporting
Starting January 1, 2024, dealers selling vehicles that are eligible for the Clean Vehicle Tax Credit (IRC Sections 30D and 25E) must file time-of-sale reports within three days via the IRS ECO Tool. To address compliance challenges, the IRS has introduced temporary relief.
Temporary Suspension of Three-Day Deadline
On December 10, 2024, the IRS suspended the three-day reporting deadline for 2024 sales. Dealers can retroactively submit reports for missed deadlines but should file promptly to avoid delays. For late submissions involving buyer-elected credit transfers, additional documentation may be required.
Correcting Errors
To maintain compliance, dealers must address errors in submitted reports promptly. Common issues and actions include:
- Vehicles Never Placed Into Service
- If a vehicle was sold but not placed into service, dealers must file a cancellation request through the ECO portal to void the credit.
- Once the cancellation is approved, a new time-of-sale report may be filed to claim the credit on a qualifying transaction.
- Leased Vehicles (Ineligible for Credit)
- Leased vehicles do not qualify for the Clean Vehicle Tax Credit. If a credit was claimed in error, a cancellation request must be submitted immediately.
- Incorrect Vehicle Identification Numbers (VINs)
- Any errors in VIN entries must be corrected to ensure accurate processing. Dealers can revise reports via the ECO portal or contact the IRS through the secure messaging tool for assistance.
- Buyer-Elected Credit Transfers
- For late-submitted reports where the buyer elected to transfer the credit to the dealer, proof must be provided that the election occurred at the time of sale. This could include signed documentation from the buyer.
- Duplicate Reports
- If multiple reports are submitted for the same transaction, dealers should work with the IRS to cancel the duplicates and ensure only the correct report is processed.
Take Action Now
- Submit all overdue 2024 reports immediately.
- Regularly review and update submitted reports to correct errors.
- Maintain thorough documentation for all clean vehicle transactions, especially buyer elections.
Support and Resources
The IRS ECO portal provides tools to assist dealers with compliance, including the IRS FAQ on Clean Vehicle Returns and Cancellations.
For further assistance consult with our HHM Dealership Services professionals.