Use these steps for claiming clean vehicle tax credits, including how to make sure you get a time-of-sale report that documents your purchase. Reminder: For eligible clean vehicles placed in service on or after Jan. 1, 2024, you must obtain a copy of the accepted time-of-sale report submitted through IRS Energy Credits Online (ECO). Step 1: Check eligibility Make sure you meet the necessary criteria as a buyer and the make and model you plan to buy is eligible for a credit. New clean vehicles Used clean vehicles Vehicles purchased for commercial use follow a different process and don't require the seller to provide a time-of-sale report. Step 2: Purchase vehicle When you buy the vehicle: Confirm with the seller the car you have selected is eligible for the credit. Choose when to take the credit: Take the credit immediately: Reduce the amount you pay at the time of sale for the vehicle by transferring the credit to the seller. The dealer must be a registered dealer and vehicle must be purchased mainly for personal use. You can make no more than 2 elections to transfer a clean vehicle credit each tax year. Wait and take the credit when you file your tax return for the year when you took possession of the vehicle. Possession is when the car is delivered to you or you drive it off the lot. For more information on how to transfer a credit see the Frequently asked questions about transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit. Step 3: Get a time-of-sale report When you take possession of the vehicle, the seller must give you a time-of-sale report and a copy of the confirmation the IRS provides when it accepts the time-of-sale report submitted through IRS ECO. This gives you: Proof of your purchase's eligibility for the credit, the amount of the credit available for the specific VIN you are purchasing, and whether the credit was transferred to the dealer. Confirmation that the dealer reported the sale to the IRS within the required 3-day period. If you have a paper copy of your time-of-sale report, skip to Step 5. If you didn't receive a time-of-sale report, proceed to Step 4. Step 4: If you didn't get a time-of-sale report: Contact your seller If you didn't get a time-of-sale report at the time of purchase or you lost it, contact the seller to get a copy of the report. If you do not have a successfully submitted time-of-sale report, you are not eligible to claim the credit. Step 5: File Form 8936 with your tax return You must ensure the seller has successfully submitted the Time of Sale report through IRS ECO to claim the credit. You will need to file Form 8936, Clean Vehicle Credits when you file your tax return for the year in which you took delivery of the vehicle. You must file the form whether you transferred the credit at the time of sale or you're claiming the credit on your return. If the return is rejected due to Form 8936, ensure the VIN was input correctly. Note there are no letters “O”, “Q” or “I” in a VIN. If the VIN was input correctly and you believe the vehicle is eligible, attach a file or explanation to substantiate the purchase before resubmitting the return.
