Some drivers who bought an electric vehicle (EV) in 2024 have received an unpleasant shock this tax season: The IRS has rejected their returns.
The taxpayers had done nothing wrong. Dealerships, however, had missed a tight window for submitting paperwork to the IRS.
Tax Rebate Program Requires Dealers to be Quick With Paperwork
The federal government offers buyers a tax rebate of up to $7,500 on the purchase of a new EV, as long as the automaker meets specific rules about where it builds the car and sources certain minerals for the battery.
Buyers can claim the credit themselves or use it as a down payment.
Some who chose the former, however, have had their returns rejected this year. NPR explains, “Some electric car shoppers across the country discovered this spring that they couldn’t get the EV tax credit they expected, because their car dealer had not correctly reported their 2024 purchase to the IRS through a new online portal.”
The IRS allows dealers only three days after a sale is complete to file the report. It proved easy to miss such a tight window if a dealership faced a technology hiccup or an employee was sick. Last year, thousands of dealerships faced a cyberattack that took critical computer systems offline for as long as two weeks.
They may have missed an untold number of tax rebate deadlines through no fault of their own.
IRS Has Re-Opened Time Window
Now, the Detroit Free Press reports, “A fix could be on the way. But you’re going to need to see your car dealer, not your tax professional, first.”
The National Automobile Dealers Association (NADA) told its members this week that the IRS has re-opened the portal for late submissions.
NADA tells dealers, “It is unclear how long the functionality will remain open, but according to the IRS, dealers can begin using the portal now.”
That system lets dealers create a time-of-sale report. Taxpayers with rejected returns should ask dealers for a copy, the Free Press reports, which should allow them to complete their return.
“If there are taxpayers who did not get the credit they were entitled to because the dealer did not submit the sale on the portal, they should go back to the dealership and have them submit through the portal,” tax professional Mike Mader, principal and leader of Baker Tilly’s dealership practice, told the Free Press.
Taxpayers with questions can also call the IRS helpline at (800) 829-1040. Be prepared to wait, however. The agency has recently laid off thousands of workers during peak tax season as part of President Trump’s government efficiency initiative.
