Dealer Update: IRS Clarifies Expiring Clean Vehicle Tax Credits – Key Takeaways Before September 30

The IRS has released a new FAQ outlining how the clean vehicle tax credits—set to expire September 30, 2025—will wind down. These credits for new, used, and commercial clean vehicles have been an important sales driver, and the new guidance clears up several important questions for dealers.

What Dealers Should Know

Acquired vs. Placed in Service
The IRS now distinguishes between when a vehicle is “acquired” and when it is “placed in service.” A vehicle counts as acquired once a binding sales contract is signed and a payment is made, whether that’s a deposit or a trade-in. But it’s only considered placed in service when the buyer actually takes possession. Dealers should be prepared to explain this difference to customers.

Credits After September 30
If a buyer acquires a vehicle on or before September 30, 2025, they can still qualify for the credit—even if they don’t take delivery until after the deadline. This provides some flexibility for handling orders and deliveries as the program sunsets.

Transferring Credits
The decision to transfer a clean vehicle credit happens at the point of sale, not before. For credit purposes, the deal isn’t complete until the buyer takes delivery.

Time of Sale Reports
Dealers are responsible for providing a time of sale report either at delivery or within three days of the customer receiving the vehicle. This report is necessary for customers to claim their credit.

Energy Credits Online Portal
Dealers not yet registered for the Energy Credits Online portal should act quickly—new registrations close September 30, 2025. Those already registered will still have limited access afterward, including the ability to file and amend reports.

What’s Still Unresolved
The IRS has not yet clarified how acquisition rules apply to leased vehicles, how pending reports will be treated, or how long after the deadline dealers will be able to submit late reports.

Next Steps for Dealers
The FAQ underscores both compliance requirements and sales opportunities in the final stretch. Now is the time to:

• Train sales teams to communicate the credit rules clearly.
• Double-check processes for time of sale reporting.
• Ensure portal registration is completed before the deadline.
• Keep an eye out for further IRS guidance.

By preparing now, dealerships can deliver a smoother customer experience, maximize year-end sales, and minimize compliance risks.

For the full IRS FAQ, visit: IRS FAQ on Clean Vehicle Credits