As reported via IR-2023-202 on 11/1/2023

IRS opens free Energy Credit Online tool for sellers of clean vehicles to register for time-of-sale reporting and dealer advance payments for the Clean Vehicle Credit

The Internal Revenue Service announced today that sellers of clean vehicles can now register using the new IRS Energy Credits Online tool, available free from the IRS.

Known as IRS Energy Credits Online or IRS ECO, this free electronic service is secure, accurate and requires no special software. Though available to any business of any size, IRS Energy Credit Online may be especially helpful to any small business that currently sells clean vehicles.

The IRS’s new Energy Credits Online tool will allow dealers and sellers of clean vehicles to complete the entire process online and receive advance payments within 72 hours. The tool will generate a Time of Sale report that the taxpayer will use when filing their federal tax return to claim or report the credit.

“This special online tool is designed to help dealers and sellers navigate this important new Clean Vehicle Credit and help taxpayers at tax time,” said IRS Commissioner Danny Werfel. “Online tools like this are part of the larger effort taking place at the IRS with Inflation Reduction Act funding to make improvements and better serve both taxpayers and businesses.”

Beginning in 2024, clean vehicle sellers and licensed dealers must use the tool for their customers to successfully claim or transfer the new or previously owned clean vehicle credit for vehicles placed in service 1/1/2024 or later.

The IRS issued proposed regulations, Revenue Procedure 2023-33 and frequently asked questions on Oct. 6, 2023, that provide details to sellers to register with the IRS to be eligible to receive the credit transfers from taxpayers, and details that to participate, a dealer must verify their identity using the IRS identity verification system and register through IRS Energy Credits Online tool.

The IRS encourages any dealer or seller to register using Energy Credits Online to share in its benefits.

These benefits include:

• Advance payments to dealers will typically occur within 72 hours of an accepted clean vehicle credit transfer Time of Sale report.

• The IRS acknowledges receipt and confirmation in real time that a qualified manufacturer has provided the VIN being sold as eligible when a Time of Sale report is submitted.

• Users can make corrections to information submitted through the tool.

• The tool keeps issuer information from year to year.

Enrollment in the IRS Energy Credit Online tool is now open. Clean vehicle sellers should begin the online enrollment process immediately.

Initially, only one individual representative of the dealer or seller who is currently authorized to legally bind the dealer or seller can complete the initial registration through IRS Energy Credits Online. Starting December 2023, dealers and sellers will be able to authorize more than one employee to submit Time of Sale reports and advance payment requests.

(This is Blog Post #1452)