With the deadline approaching for the end of the used car clean vehicle tax credit, the IRS issued guidance for consumers and dealers.
Under the provisions of the One Big Beautiful Bill Act signed into law by President Donald Trump July 4, the clean vehicle credit for used and new vehicles will not be offered for vehicles acquired after Sept. 30, 2025.
In its guidance, the IRS defined acquired, as the “date a written binding contract is entered into and a payment has been made.” The payment can be a down payment or trade-in. As long as the vehicle is acquired through a written binding contract by Sept. 30, it will be eligible for the credit if it is put into service after that date.
The IRS stated that the time of sale report from the dealer should be issued to the consumer when they take possession of the vehicle, or within three days of taking possession.
The IRS will close the Clean Vehicle Credit portal for new user registration on Sept. 30. The portal will remain open after that date for “limited usage” for previously registered users to submit time of sales reports and updates.
To qualify for the used car clean vehicle credit, the vehicle must be $25,000 or less, older than two model years, weigh less than 14,000 pounds and have a 7-kilowatt battery. The purchaser must also meet several requirements. Consumers must fall in certain income thresholds ($150,000 or less for joint filers, $112,500 or less for head of household, and $75,000 or less for other filers).
