IRS Issues Fact Sheet About Expiration of Clean Vehicle Credits

The Fact Sheet answers some, but not all, key questions for dealers and consumers regarding the September 30 deadline. The Fact Sheet explains:

• Acquisition and Claiming a Credit: If a taxpayer acquires a vehicle by having a written binding contract in place and a payment made on or before September 30, then the taxpayer will be entitled to claim the credit when they place the vehicle in service(namely, when they take possession of the vehicle), even if the vehicle is placed in service after September 30.
• Definition of “placed in service” versus “acquired”: A vehicle is “placed in service” when the taxpayer takes possession of the vehicle. A vehicle is “acquired” as of the date a written binding contract is entered into, and a payment has been made. A payment includes a nominal down payment or a vehicle trade-in.
• Credit Transfer Election: Taxpayers should wait until the time of sale (when the taxpayer takes possession) to make the credit transfer election.
• Time of Sale Reporting: Dealers should provide customers with a time of sale report when the customer takes possession or within three days of taking possession of the vehicle.
• Access to the Energy Credits Online Portal: While new user registration through the portal will close on September 30, the portal will remain open after September 30, so successfully registered users can submit time of sale reports, update such reports, and use the portal for other limited purposes.

Some key unanswered questions include:

• How the definition of “acquisition” operates in the context of leases under 45W;
• Whether the IRS will approve the late time of sale reports in “pending status” before the end of this calendar year; and
• How long dealers will be able to submit untimely time of sale reports, including through the spring of 2026 or prior to the April 15, 2026, tax deadline or October 15, 2026, extension period.

NADA remains in close contact with the Department of the Treasury and the IRS to determine answers to key questions and issues dealers face. NADA will update its members on any additional guidance regarding the clean vehicle tax credits as the information becomes available.