Topic J — Frequently asked questions about seller report information for buyers of New and Previously Owned Clean Vehicle Tax Credits beginning in 2024

 

Updated FAQs were released to the public in Fact Sheet 2023-29PDF, Dec. 26, 2023.

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

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

Q1.What must a buyer of a clean vehicle provide a seller in order to purchase a new clean vehicle or previously owned clean vehicle and claim the applicable tax credit on their tax return? (added Oct. 6, 2023)

A1. The buyer must provide the seller information necessary, including name, taxpayer identification number (which may be a Social Security number) and valid identification for the seller to successfully submit a seller report to the IRS. See Topic H, FAQ 6.

Q2. How can a buyer confirm that they will be able to claim a tax credit for a new or previously owned clean vehicle? (added Oct. 6, 2023)

A2. For vehicles placed in service Jan. 1, 2024, or after, sellers will submit seller reports electronically to the IRS. The IRS’s acceptance of this seller report means a qualified manufacturer has submitted the VIN listed in the seller report to the IRS as an eligible vehicle. For previously owned clean vehicles, sellers will also provide the sale price (which must be $25,000 or less) and review vehicle history reports in making attestations regarding the vehicle’s eligibility. Eligible buyers can rely on a seller report that a seller has submitted electronically to the IRS, that the IRS has accepted, and that the seller has provided to the buyer, as confirmation that the vehicle is eligible. The buyer must still meet eligibility requirements, which are described in elsewhere in these FAQs to claim the credit or to transfer the credit to a dealer. 

For more eligibility information, please see the IRS New Clean Vehicle ChecklistPDF and Previously Owned Clean Vehicle ChecklistPDF.