We've been keeping you updated on the $7,500 federal clean vehicle tax credit throughout the year. Now we share the latest update from the Internal Revenue Service involving new guidance for both car shoppers and auto dealers. Essentially starting in 2024, the rules will allow point of sale federal tax credits, so car buyers don't have to wait until they file their taxes to get the credit. This starts effective January 1, 2024.
New IRS Guidance
On October 6th, 2023, the IRS issued proposed regulations, Revenue Procedure 2023-33 and 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."
You can check out our initial 2023 IRS Guide to the $7500 Clean Vehicle Tax Credit (posted in January) here. Read the new requirements as of this past April 18, 2023 here.
Eligible Vehicles
Here's an updated list of vehicles that are eligible for either a full $7,500 or partial $3,750 credit sourced from Electrek:
All-Electric
Ford Mustang Mach-E. Photo: Amy Plemons/CarPro.
Up to 7,500 Credit
- Cadillac LYRIQ (2023-2024) ($80,000 MSRP limit)
- Chevrolet Blazer EV (2024) ($55,000 MSRP limit)
- Chevrolet Bolt EV and EUV (2022-2023) ($55,000 MSRP limit)
- Chevrolet Equinox EV (2024) ($55,000 MSRP limit)
- Chevrolet Silverado EV (2024) ($80,000 MSRP limit)
- Ford F-150 Lightning (2022-2023)($80,000 MSRP limit)
- Ford Mustang Mach-E (2022-2023)($80,000 MSRP limit)
- Ford e-Transit (2022-2023) ($80,000 MSRP limit)
- Tesla Model 3 Standard Range RWD/Long Range (2022-2023) ($55,000 MSRP limit)
- Tesla Model 3 Long Range AWD (2023) ($55,000 MSRP limit)
- Tesla Model 3 Performance (2022-2023) ($55,000 MSRP limit)
- Tesla Model X Long Range (2023) ($80,000 MSRP limit)
- Tesla Model Y AWD/Long Range/Performance (2022- 2023) ($80,000 MSRP limit)
- VW ID.4 / ID.4 S (2023)
- VW ID.4 Pro/Pro S/Pro S Plus (2023)
- VW ID.4 AWD Pro/AWD Pro S/AWD Pro S Plus (2023)
Up to $3,750 Credit
- Rivian R1T (2022-2023) ($80,000 MSRP limit)
- Rivian R1S (2022-2023) ($80,000 MSRP limit)
Plug-in Hybrid
Up to $7,500 Credit
- Chrysler Pacifica Plug-in Hybrid (2022-2024) ($80,000 MSRP limit)
- Lincoln Aviator Grand Touring (2022-2023) ($80,000 MSRP limit)
- Lincoln Corsair Grand Touring (2022-2023) ($80,000 MSRP limit)
Up to $3,750 Credit
- BMW X5 xDrive50e (2024) ($80,000 MSRP limit)
- Ford Escape Plug-in Hybrid (2022-2023) ($80,000 MSRP limit)
- Jeep Grand Cherokee 4xe (2022-2024) ($80,000 MSRP limit)
- Jeep Wrangler 4xe (2022-2024) ($80,000 MSRP limit)
You can find the IRS's most recent, up to date FAQ sheet here.
To learn more about the clean vehicle tax credit you can also visit fueleconomy.gov.
