EV Tax Credit Rejections: IRS Offers Solutions to Owners
Facing an EV tax credit rejection? Learn why it's happening and what steps the IRS recommends to resolve this growing issue.
Many electric vehicle (EV) buyers are facing challenges as their EV tax credit claims get rejected by the IRS. The problem arises because rules now need car dealerships to submit “time of sale” forms within seventy-two hours after closing each sale. The lack of such report prevents buyers from claiming their tax credit thus creating confusion among several EV buyers who seek clarification.
The expanded EV tax credit, which began in 2024, allows buyers to apply for up to $7,500 at the point of sale rather than waiting to claim it on tax returns. Administration intended to speed up the process through this new change but the additional reporting duty from dealerships caused both delays and rejections for qualified taxpayers.
Dealership Errors Trigger Rejections
The primary reason for EV tax credit rejections is that many dealerships have failed to submit the required “time of sale” report through the IRS Energy Credits Online portal. To receive the credit the buyer needs this report which stands as a vital requirement for the qualification process. Some wrongdoings have been acknowledged by dealerships which now work alongside IRS officials to address these mistakes.
An employee at WRAL managed to qualify for a $4,000 credit after purchasing their EV in 2024. The IRS rejected the tax return claim filed in 2024 because the dealership submitted the report after the deadline. Across the country similar reporting errors have been noticed but the total number of affected purchasers remains unknown.
IRS Responds to Buyer Concerns
The IRS is aware of the EV tax credit rejection issue and has stated that they are actively working toward a solution. Buyers who get rejected by the IRS can provide further proof to support their claim through paper notices sent by mail. Taxpayers can reply with essential paperwork within a sixty-day period starting from the date they receive the notice through the mail.
According to the IRS spokesperson buyers should submit their qualified EV purchase records such as the sales agreement as proof when attempting to resolve the rejection. Prompt responses from buyers allow them to prevent prolongation of their claim processing period.
Steps EV Buyers Can Take
For those impacted by EV tax credit rejections, there are steps to take to address the situation. Dealership verification of submitted “time of sale” reports should be a first step for buyers. Buyers must instruct dealerships to file the documentation since these submissions were not made correctly.
The IRS rejection notice requires you to provide all necessary documentation such as purchase records together with the instructions to proceed with your submission. The submission process guarantees qualified buyers will obtain their entitled credit even when their first application was denied.
A Nationwide Issue with Ongoing Solutions
The EV tax credit rejection problem is not isolated, with reports of similar issues surfacing across the country. The IRS continues to work on fixing the problem while buyers who experienced an EV tax credit rejection should take significant steps to get their claims processed.
The expanded EV tax credit was designed to encourage EV adoption and make the process more convenient for buyers. The dealership compliance problems demonstrate the essential requirement for enhanced cooperation between sellers and buyers and the Internal Revenue Service.
