Topic F — Frequently asked questions about claiming the Previously Owned Clean Vehicles Credit

Updated FAQs were released to the public in Fact Sheet 2024-26 PDF, July 2024.

The Inflation Reduction Act of 2022 (IRA) makes several changes to the tax credit provided in section 30D of the Internal Revenue Code (Code) for qualified plug-in electric drive motor vehicles, including adding fuel cell vehicles to the section 30D tax credit. The IRA also added a new credit for previously owned clean vehicles under section 25E of the Code.

These FAQs provide detail on how the IRA revises the credit available under section 30D (New Clean Vehicle Credit) for individuals and businesses, and information on the credit available under section 25E (Previously Owned Clean Vehicle Credit) for individuals, and the new credit for qualified commercial clean vehicles under section 45W of the Code.

Q1. What information does a dealer have to provide to a taxpayer purchasing a previously owned clean vehicle to allow the taxpayer to claim the Previously Owned Clean Vehicle Credit? (added Dec. 29, 2022)

A1. A dealer must provide the following information on a report to the taxpayer and to the IRS:

• Name and taxpayer identification number of the dealer.
• Name and taxpayer identification number of the taxpayer.
• Vehicle identification number of the vehicle.
• Battery capacity of the vehicle.
• The date of the sale and the sale price of the vehicle.
• Maximum credit allowable for the vehicle being sold.
• For sales after December 31, 2023, the amount of any transfer credit applied to purchase.
• A declaration under penalties of perjury from the dealer.

The dealer must provide the report to the taxpayer not later than the date the vehicle is purchased. For further details on dealer reporting see Topic B, FAQs 7-9 and Revenue Procedure 2022-42.

Q2. Do I have to report the vehicle identification number on my return to claim the Previously Owned Clean Vehicle Credit? (updated July 26, 2023)

A2. Yes. The vehicle identification number of the previously owned clean vehicle is required to be included on Schedule A (Form 8936), Clean Vehicle Credit Amount, which must be filed with Form 8936, Clean Vehicle Credit, when you file your income tax return.

Q3. Is the Previously Owned Clean Vehicle Credit refundable or able to be carried forward? (updated Oct. 6, 2023)

A3. No. The Previously Owned Clean Vehicle Credit may be used by a taxpayer only to the extent the taxpayer has a reported tax due. The credit cannot be carried forward to apply to future year tax returns, and the excess is not refundable. In addition, see Topic H, FAQ 3 regarding transfer of the clean vehicle credits.