2023 Clean Vehicle Sales Reports: IRS Extends Deadline and Changes Submission Method
What’s new: The IRS extended the deadline for submission of 2023 Clean Vehicle Sales Reports until Feb. 15, 2024 (from Jan. 31, 2024) and is only accepting the reports by fax at this time. Dealers who have already submitted their 2023 Clean Vehicle Sales reports do not need to resubmit them.
Why it matters: The reports are required for 2023 sales that qualify for either the Section 25E previously owned clean vehicle credit or the new clean vehicle credit under Section 30D.
Not yet filed? Dealers who have not yet filed their reports must now fax them directly to 855.755.7437 until further notice.
More information: NADA anticipates that the IRS may provide more information relating to 2023 Clean Vehicle Sales Reports soon and will provide additional updates as warranted. Dealers may find the most recent information provided by the IRS on the IRS Clean Vehicle Credit Seller or Dealer Requirements webpage.
Reminder: The IRS prefers the reports to be provided in a spreadsheet, but dealers may also submit copies of individual seller reports on IRS Form 15400 or equivalent forms containing the required data the dealer used in calendar year 2023. Dealers that used reasonable alternatives to Form 15400 in providing the required seller reports to buyers do not need to prepare the information in the Form 15400 format. Also, reports are not required for lease transactions or sales that qualify for the commercial clean vehicle credit under Section 45W.
Beginning Jan. 1, 2024, customers will be able to transfer their federal new and used clean vehicle tax credits to dealerships registered through the ECO portal at the time of sale. As of Jan.1, all dealers — regardless of whether the customer elects to transfer a credit — must submit time of sale reports for clean vehicle transactions through the ECO portal. Dealers must be registered with the ECO portal to submit these time of sales reports.
In addition, when registering, dealers are required to designate someone to serve as a “Super User” to manage the use of the ECO portal. The Super User will be able to delegate permission for other employees to use the ECO portal to effectuate a customer’s credit transfer election and submit time of sale reports.
Seller Reports are necessary for clean vehicle sales involving Section 25E and Section 30D credits and must be provided to both buyers and the IRS at the time of sale. Beginning Jan. 1, all seller reports must be prepared and submitted through the ECO portal. Consequently, if your dealership has not yet registered, you should do so immediately even if you do not intend to accept credit transfers.
Dealership IRS Energy Credits Online Registration Information
IRS Energy Credits Online Tool: Register dealerships to receive advance EV tax credit payments.
Energy Credits Online Registration User Guide: Step-by-step instructions for using the IRS Energy Credits Online tool.
Permission Management User Guide: Instructions for adding additional dealership users for the IRS Energy Credits Online tool.
Determine federal tax credit eligible vehicles: Visit the fuel economy government site to determine which vehicles are eligible for tax credits
If you continue to have any problems, you may contact firstname.lastname@example.org with questions. The IRS is committed to helping you navigate this new process.
NADA: Lease-related EV tax credits return for 2024
Good news: Following significant advocacy by NADA, on Dec. 20, the U.S. Department of the Treasury renewed the “safe harbor” for Section 45W clean vehicle tax credits for commercial vehicle sales in 2024.
What does this mean: Leasing companies will be able to continue leasing qualifying EVs in 2024 and pass on to consumers up to $7,500 from the tax credit they receive. In addition, other commercial buyers will be able to continue to claim tax credits on their EV purchases.
It is important because: Section 45W commercial clean vehicle tax credits are much more flexible than 30D credits and are not subject to restrictive criteria such as where a vehicle’s battery components or minerals are sourced. Accordingly, for leases, the credit is available for virtually any consumer lease of an EV, regardless of adjusted gross income of the lessee. The leasing company simply passes the value of the tax credit to the customer as a savings. 45W is the reason EVs are leased at a much higher rate than other vehicles.
Don’t forget: Section 45W also applies to commercial vehicles above 14,000 GVWR and provides a credit of 30 percent of the cost basis up to $40,000 (15 percent for larger plug-in hybrid vehicles).
So what changed? Luckily, nothing. For cars sold in 2023, the IRS created a safe harbor that allowed both (1) lessors of almost all EV leases and (2) most other light-duty commercial EV purchasers to qualify for a $7,500 tax. Fortunately, the government is extending the safe harbor to 2024.
One last thing: The 30D tax credit for new vehicles will see changes in 2024 based on new criteria for eligible vehicles. NADA will continue to update its members on developments.
OADA: Ohio Dept. of Taxation concludes a transferred EV tax credit does not reduce a customer’s taxable price
Beginning Jan. 1 customers purchasing a qualifying EV will be able to transfer their EV Tax Credit pursuant to the Inflation Reduction Act of 2022 (“IRA”).
OADA asked the Ohio Department of Taxation to review the IRA and determine whether the transferred tax credit would reduce the customer’s purchase price for purposes of calculating sales tax owed. After careful consideration, the Department concluded that a transferred tax credit is similar to a manufacturer rebate and does not reduce a customer’s taxable price. Dealers can read the department’s Information Release for additional information.
OADA recommends that dealers itemize the amount of the transferred tax credit on buyers’ orders and retail installment contracts. Dealers may also discuss this issue with their finance sources for additional instruction. As always, if dealers have questions regarding EV Tax Credits under the IRA, talk with your accounting professional.