How To Use Form 15400 To Claim Clean Vehicle Credits

Form 15400: The New Reporting Essential

Starting in 2023, sellers of vehicles that are eligible for a new clean vehicle credit (IRC 30D) and used vehicles (IRC 25E) must furnish a report to the buyer at the time of sale and then to IRS for those vehicles to be eligible for a credit. That form is 15400, and it covers the usual information you would expect such as dealership and buyer information. It also covers:

• Vehicle Identification Number
• Battery Capacity
• Date of Sale
• Date Placed in Service
• Model Year
• Total Sale Price
• Maximum Credit Allowable

Exciting Changes in 2024: Clean Vehicle Credit Transfer

2024 brings about another game-changer. Buyers will have the option to transfer clean vehicle credits directly to the dealership at the time of purchase, effectively using these credits as a down payment. This shift in dynamics promises to benefit both buyers and sellers.

It’s crucial for dealerships to register with the IRS to facilitate this process. Dealers can also explore the option of registering for advanced payments on the sales of new/used clean vehicles, making the whole process more efficient.

How Do I Use The Clean Vehicle Credit?

Form 15400 FAQ For Dealerships:

Q1: What is Form 15400, and why do dealerships need to complete it?

Form 15400 is a document that dealerships must fill out for each eligible sale of electric or hybrid vehicles. It contains essential information required for clean vehicle credit claims, such as Vehicle Identification Number, Battery Capacity, Date of Sale, and more.

Q2: What should dealerships do with Form 15400 after completing it?

Dealerships should provide a copy of Form 15400 to the customer at the time of sale. They should also retain a copy for their internal records, as these copies will be used for IRS reporting.

Q3: When and how should dealerships report clean vehicle sales to the IRS?

Reporting to the IRS is due by January 15 of the year following the sale. Dealerships will use the information from the internal records (Form 15400 copies) to complete the IRS reporting.

Q4: What are the upcoming changes in 2024 for dealerships regarding clean vehicle credits?

In 2024, buyers will have the option to transfer clean vehicle credits to the dealership at the time of purchase for use as a down payment. Dealerships need to register with the IRS to facilitate this process.

Q5: Is creating an ID.me account necessary for dealerships, and what is its purpose?

An ID.me account is not mandatory for claiming clean vehicle credits. It may be required if the dealership plans to participate in specific programs or initiatives that demand identity verification. The account is a secure means of verifying identity.

Form 15400 FAQ For Customers:

Q1: How do customers use Form 15400?

Form 15400 is a document provided by the dealership to customers at the time of purchasing an eligible clean vehicle. It contains vital information necessary for customers to claim clean vehicle credits.

Q2: What should customers do with Form 15400 received from the dealership?

Customers should retain a copy of Form 15400 for their records. This form will be crucial when they file their taxes to claim clean vehicle credits.

Q3: How can customers claim clean vehicle credits when filing their taxes?

Customers can claim clean vehicle credits when filing their taxes by considering their modified adjusted gross income (MAGI). The IRS allows them to use the lesser of two MAGI values, either from the year they took delivery of the electric vehicle or the year before. Income limits vary by filing status (e.g., single, married filing jointly, head of household, other filing statuses) and play a pivotal role in determining eligibility for the electric vehicle tax credit.

Dealership Accounting Is Different

The EV tax credit is a perfect example of how an expert in dealerships is more helpful than a generalist accountant or advisor. There is a ton of confusion online right now. Dealership owners and customers alike feel uncertain about how to use the EV tax credit. Meanwhile, our experts are guiding dealership owners confidently and clearly to success.