TAXES

Auto dealers and sellers have until Jan. 19 to submit time-of-sale reports for clean vehicles sold Jan. 1 through Jan. 16, the IRS said.

Jan. 08, 2024

The IRS on Friday gave automobile dealers and sellers until Jan. 19 to submit time-of-sale reports for vehicles, such as electric cars, that qualify for the new clean vehicle tax credit.

Last November, the Treasury Department and the IRS said car dealers and sellers could begin to register for the IRS Energy Credits Online (ECO) portal—a key step in implementing a provision of 2022’s Inflation Reduction Act intended to lower costs for consumers and help car dealers grow their businesses by increasing access to tax credits at point of sale for new and previously owned clean vehicles.

“Researchers have found that consumers overwhelmingly prefer an immediate rebate at point of sale. Starting Jan. 1, 2024, consumers will be able to choose to transfer their new clean vehicle credit of up to $7,500 and their previously owned clean vehicle credit of up to $4,000 to a registered car dealer,” the Treasury Department said in a Nov. 1 news release. “This provision of the Inflation Reduction Act will effectively lower the vehicle’s purchase price by providing consumers with an upfront down payment on their clean vehicle at the point of sale, rather than having to wait to claim their credit on their tax return the next year. Only vehicles purchased under the consumer clean vehicle credits are eligible for this benefit.”

The ECO portal allows registered dealers to submit clean vehicle sales information to the IRS and promptly receive payment for transferred credits. Dealers will also use ECO to submit “time of sale” reports, which will confirm vehicles’ eligibility for a credit, whether or not the buyer chooses to transfer the credit to the dealer, the Treasury Department said.

To provide dealers more time to submit and intake seller reports into the IRS ECO system, the tax agency said last week it was temporarily extending the three-day time period to submit time-of-sale reports. This means dealers and sellers have until Jan. 19 to submit these reports for vehicles sold Jan. 1 through Jan. 16.

“While the IRS fine-tunes this new system and the intake of time-of-sale reports, dealers and sellers should continue to submit time-of-sale reports using IRS ECO,” the agency said on Jan. 5. “The IRS encourages sellers to use this extension only if they are unable to successfully submit a time-of-sale report when the vehicle is for a customer who intends to claim the tax credit on their tax return.”

The IRS said it’s committed to resolving any issues facing manufacturers, dealers, and sellers navigating the new ECO tool. The agency will also be providing “office hours” this week to help dealers and sellers deal with the time-of-sale reporting issues. Representatives from the IRS will be there to answer any questions.