I suggested a couple of weeks ago that if you had thoughts of getting an electric vehicle or a hybrid to take advantage of the $7,500 Federal Tax Rebate that you had better do it quickly. Incoming President Donald Trump has signaled he will do away with the rebates once he is sworn into office.
Since this is the best time of year to get a new vehicle, I thought we should remind you of which vehicles qualify for the rebates, and which ones qualify for partial rebates. One major thing that has changed since the inception of the program, is that if you qualify, you can get the money at the time of purchase and use it for a down payment. Any of our CarPro approved dealers can get the money for you up front and be reimbursed by the government.
California buyers may get a reprieve. Governor Gavin Newsom says he will replace the credits if Mr. Trump repeals them. The Governor said in a statement: “We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute.” The Governor did not say how he would fund the huge amount of money, and he will have to get passage from the California legislature.
No matter what the Trump administration does, the current rules are only in effect until December 31, 2024.
On October 6th, 2023, the IRS issued proposed regulations, Revenue Procedure 2023-33and frequently asked questions for the transfer of new and previously owned clean vehicle credits from the taxpayer to an eligible entity for vehicles placed in service after Dec. 31, 2023.
In its press release, the IRS says "the Inflation Reduction Act provides taxpayers with credits for qualified new and previously owned clean vehicles acquired and placed in service during the taxable year. Beginning Jan. 1, 2024, in certain situations, taxpayers will be able to transfer the new and previously owned clean vehicle credits to eligible entities.
The IRS's guidance clarifies how taxpayers can elect to transfer new and previously owned clean vehicle credits to dealers who are eligible to receive advance payments of either credit. The proposed regulations and revenue procedure also provide guidance for dealers to become eligible entities to receive advance payments of new or previously owned clean vehicle credits.
The proposed regulations also provide guidance for the recapturing of the credit.
The revenue procedure includes procedures for how a dealer would register with the IRS to be eligible to receive the credit transfers from taxpayers and provides details on the registration process through IRS Energy Credits Online.
It also provides procedures for the revocation and suspension of a registration if a dealer fails to comply with the program's requirements, and for the establishment of an advanced payment program to eligible entities. Finally, the revenue procedure provides new information for the timing and manner of submission of seller reports, as well as providing updated information on submission of written agreements by manufacturers to the IRS to be considered qualified manufacturers and on the method of submission of monthly reports by qualified manufacturers."
All-Electric Ford Mustang Mach-E. Photo: CarPro.