Jeff Andrews wasn’t apprehensive about claiming the EV tax credit score this 12 months; it wasn’t his first time doing so.
He adopted the identical steps as he did when he claimed the credit score in 2018: He bought a qualifying electrical automobile after which stuffed out the paperwork throughout the next tax season. But this time, when Andrews tried to say the credit score for a Chevrolet Bolt he bought in 2024, the IRS did not settle for it. “It acquired rejected virtually instantly,” Andrews informed CNET.
He’s not alone. Similar accounts are effervescent up in information stories and Reddit boards, proof that a difficulty in IRS reporting is obstructing some Americans from claiming the $7,500 low cost.
Here’s what to do should you’re in the identical scenario.
Why some folks don’t get the EV tax credit score
Andrews bought his Chevy Bolt on the primary day of 2024 — the primary day of a brand new EV tax credit score coverage that permits patrons to say the low cost on the level of sale moderately than submitting for it in a while their tax returns.
The automobile dealership, nonetheless, wasn’t ready on Jan. 1 to present Andrews the low cost on the time of buy. He says the dealership tried, for hours, to make it work, however couldn’t. Andrews wasn’t involved: He figured he may stroll out and declare the credit score on subsequent 12 months’s tax return like he had completed for a earlier EV buy.
That’s precisely what he tried to do not too long ago, submitting his return on TurboTax. But he was met with a rejection. His automobile ought to have certified for the credit score, however an error message informed him the automobile identification quantity on his tax return did not match an IRS database of EVs bought in 2024.
That’s the issue: Andrews’ dealership did not file the VIN with the IRS inside 72 hours of the automobile sale, as required beginning in 2024.
According to Mark Luscombe, a CPA and principal federal tax analyst for Wolters Kluwer Tax & Accounting, many dealerships throughout the nation have made the identical mistake.
And even now, as prospects and sellers are discovering the oversight, it appears too late to repair: The IRS would not permit the VIN to be filed past the 72-hour buy window.
The IRS didn’t reply to a request for remark.
How to take care of the issue
There’s not a lot that EV patrons on this scenario can do proper now.
First, be certain the VIN submitting actually is the difficulty. There are many different necessities to qualify for the EV credit score, together with earnings limits and particulars about how the automobile is manufactured. Rule out different points which will merely disqualify you earlier than you blame the automobile dealership, says Lisa Greene-Lewis, a CPA and spokesperson for TurboTax. You also can contact your automobile dealership and ensure whether or not it filed your VIN correctly.
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If you actually are in the identical boat as Andrews, and it is a easy oversight in record-keeping, you is likely to be caught for now. One choice, Luscombe says, is to attend a bit longer into tax season to see if the difficulty is resolved earlier than submitting your return. While the IRS might concentrate on, and even attempting to repair, this downside, there isn’t any assure {that a} resolution will materialize earlier than the April 15 tax submitting deadline.
Andrews, who additionally referred to as the IRS to no avail, sees a easy treatment: Allowing automobile sellers to enter VINs from final 12 months for any automobile gross sales they did not report. “It ought to be one thing that is simple to repair,” he stated.
Until then, Andrews is ready to see if the IRS makes a change within the subsequent month or so. “I’m in limbo,” he stated.
How the EV tax credit score works
In most circumstances, claiming the EV tax credit score is just not this difficult.
Starting in 2024, automobile sellers have been capable of provide the low cost on the level of sale, that means prospects take $7,500 off the sticker worth and needn’t file for the tax credit score later. (The automobile supplier later claims the credit score on its finish.)
This has been fashionable, and understandably most prospects have chosen to do that moderately than take care of IRS paperwork.
The automobile you are buying should additionally qualify. You can view the total listing of these automobiles right here. These EVs meet particular standards on battery scouring and home meeting and fall below designated costs. To declare the credit score, you want an earnings under $300,000 for married {couples} or $150,000 for people.
The credit score for qualifying new EVs is $7,500, however some used EVs additionally qualify for a $4,000 credit score.
And one final tip: If you aren’t getting the credit score on the time of buy and plan to say it in 2026, make it possible for the salesperson has filed your VIN with the IRS earlier than you allow the dealership.
