To ensure the dealer passes on the full tax credit amount, follow these steps:
- Verify Dealer Requirements:
- Dealers are required to pass the full amount of the tax credit to the buyer if the credit is transferred at the time of sale.
- The dealer acts as a pass-through and does not need to have tax liability to participate.
- Request Time-of-Sale Report:
- At the time of purchase, ensure the seller provides a time-of-sale report that includes the vehicle’s eligibility for the credit and whether the credit was transferred.
- This report confirms the dealer reported the sale to the IRS within the required period.
- Confirm Credit Transfer Details:
- If you choose to transfer the tax credit to the dealer, you must provide your taxpayer identification number and confirm other details like your income eligibility.
- Ensure the seller includes the credit amount in the purchase agreement and deducts it from your vehicle price.
- File Form 8936:
- Regardless of whether you transferred the credit, you must file Form 8936 with your tax return to officially claim the credit.
- Ensure the VIN is correctly input on the form to avoid filing issues.
- Verify Credit Application:
- If the return is rejected, review the VIN entry and attach any necessary documentation to substantiate the purchase if needed.
By following these steps, you can ensure that the dealer passes on the full tax credit amount as required by law.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-can-i-ensure-the-dealer-passes-on-the-full-tax-credit-amount/
