To ensure that the dealer passes on the tax credit, follow these steps:
- Verify Dealer Registration: Before purchasing, confirm that the dealership is registered with the IRS to accept and pass through the credit. Federal guidance requires dealers to register to use tax credits starting in 2024.
- Understand the Transfer Process: In 2024 and beyond, you have the option to transfer your tax credit to the dealer at the time of sale, which can be used as a direct discount on the vehicle purchase.
- Receive a Time-of-Sale Report: At the time of sale, ensure that the dealer provides you with a time-of-sale report and a copy of the IRS confirmation that they have reported the sale through the IRS Energy Credits Online Portal.
- Review the Report: Check the report to confirm:
- Proof of the vehicle’s eligibility for the credit
- The amount of the credit available for the specific vehicle (based on its VIN)
- Whether the credit was transferred to the dealer.
- File Form 8936: Even if you transfer the credit to the dealer, you will still need to file IRS Form 8936 when submitting your tax return to verify that the dealer reported the sale correctly.
- Ensure Proper Use of the Credit: Confirm with the dealer how the credit will be applied to your purchase, whether as a cash discount or applied to a down payment.
By following these steps, you can ensure that the tax credit is properly transferred and applied to your vehicle purchase.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-steps-do-i-need-to-take-to-ensure-the-dealer-passes-on-the-tax-credit/
