IRS Update: Tax Credit Available if Down Payment Placed by September 30.

[MAhauler]

On Thursday, the IRS issued a new FAQ about tax credits:

Here's the direct link: https://www.irs.gov/newsroom/faqs-f...-known-as-the-one-big-beautiful-bill-act-obbb

They list the various expiring credits. See Item 30D :

Here's what "acquired" means:

A payment "includes a nominal downpayment or a vehicle trade-in".

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[RickLightning]

Must be a "written binding contract". That means that 99% of vehicle transactions before purchase don't qualify, because they aren't binding contracts. If you can walk, it's not binding.

 

[TaxmanHog]

https://www.f150lightningforum.com/...lose-federal-ev-tax-credit.29132/#post-560823


(July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA)


FS-2025-05, Aug. 21, 2025

This fact sheet provides answers to frequently asked questions (FAQs) related to § 45Z of the Internal Revenue Code.

These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer’s specific facts and circumstances, and they may be updated or modified upon further review. Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability. Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so.

More information about reliance is available. These FAQs were announced in IR-2025-86.

1. Which energy credits and deductions are expiring under OBBBA, and what are their new termination dates?
OBBBA accelerated the termination of several energy credit and deduction provisions. The following incentives expire the soonest:

Code Section	Section Title	Termination Date
25C	Energy efficient home improvement credit	The credit will not be allowed for any property placed in service after December 31, 2025.
25D	Residential clean energy credit	The credit will not be allowed for any expenditures made after December 31, 2025.
25E	Previously-owned clean vehicles credit	The credit will not be allowed with respect to any vehicle acquired after September 30, 2025.
30C	Alternative fuel vehicle refueling property credit	The credit will not be allowed for any property placed in service after June 30, 2026.
30D	New clean vehicle credit	The credit will not be allowed for any vehicle acquired after September 30, 2025.
45L	New energy efficient home credit	The credit will not be allowed for any qualified new energy efficient home acquired after June 30, 2026.
45W	Qualified commercial clean vehicle credit	The credit will not be allowed for any vehicle acquired after September 30, 2025.
179D	Energy efficient commercial buildings deduction	The deduction will not be allowed with respect to any property the construction of which begins after June 30, 2026.

Future guidance will be issued on other provisions impacted by the passage of OBBBA.

2. For purposes of the expiring clean vehicle credits under sections 25E, 30D, and 45W, what does “acquired” mean?
For purposes of sections 25E, 30D, and 45W, a vehicle is “acquired” as of the date a written binding contract is entered into and a payment has been made. A payment includes a nominal downpayment or a vehicle trade-in.

3. What effect does “acquisition” of a vehicle have on a taxpayer’s ability to claim a credit under sections 25E, 30D, and 45W?
Acquiring a vehicle prior to the termination date is an initial step, but acquisition alone does not immediately entitle a taxpayer to a credit. Sections 25E(a), 30D(a), and 45W(a) require the vehicle be “placed in service” to claim the respective credit (see IRS.gov for additional requirements). If a taxpayer acquires a vehicle by having a written binding contract in place and a payment made on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when they place the vehicle in service (namely, when they take possession of the vehicle), even if the vehicle is placed in service after September 30, 2025. Taxpayers should receive a time of sale report from the dealer at the time they take possession or within three days of taking possession of the vehicle.

4. Can an election to transfer a clean vehicle credit be made at the time of acquisition?
Acquisition alone does not immediately entitle a taxpayer to a credit. Taxpayers should wait until the time of sale to make the credit transfer election. The election to transfer the credit generally occurs at the time of sale, which is when the taxpayer takes possession (see Treas. Reg. secs. 1.25E-1(b)(19), 1.25E-3(b)(7) and 1.30D-2(b)(47), and 1.30D-5(b)(10)), and Rev. Proc. 2023-33.)

5. What will happen to the Energy Credits Online portal with the new termination periods for the clean vehicle credits?
New user registration for the Clean Vehicle Credit program through the Energy Credits Online portal will close on September 30, 2025. The portal will remain open beyond September 30, 2025, for limited usage by previously registered users to submit time of sale reports and updates to such reports, such as when a vehicle has been returned.

6. For purposes of the energy efficient home improvement credit under section 25C, are qualified manufacturers required to make periodic written reports to the IRS regarding specified property?
No. Because of the accelerated termination of the section 25C credit, periodic written reports, including reporting for property placed in service before January 1, 2026, are no longer required. A manufacturer is still required to register with the IRS to become a qualified manufacturer for its specified property to be eligible for the credit.

7. For purposes of the residential clean energy credit under section 25D, can a credit be claimed for property installed after December 31, 2025, or constructed after that date, if a taxpayer pays for the property on or before December 31, 2025?
No. Section 25D(e)(8)(A) provides that an expenditure with respect to an item is treated as made when the original installation of the item is completed. If installation is completed after December 31, 2025, the expenditure will be treated as made after December 31, 2025, which will prevent the taxpayer from claiming the section 25D credit. In the case of an expenditure made in connection with the construction or reconstruction of a structure, section 25D(e)(8)(B) provides that such expenditure will be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins. If such construction or reconstruction is completed and taxpayer’s original use of the structure begins after December 31, 2025, the expenditure will be treated as made after December 31, 2025, which will prevent the taxpayer from claiming the section 25D credit.

 

[RLXXI]

5. What will happen to the Energy Credits Online portal with the new termination periods for the clean vehicle credits?
New user registration for the Clean Vehicle Credit program through the Energy Credits Online portal will close on September 30, 2025. The portal will remain open beyond September 30, 2025, for limited usage by previously registered users to submit time of sale reports and updates to such reports, such as when a vehicle has been returned.

I have a specific question about (Energy Credits Online portal) namely, what is that for?

Last year I filled out all the info when I did my taxes, I didn't use any such portal and received back the 30%.

I assumed I would do the same thing this year as I have more solar and energy star compliant purchases and just add the truck along with all of that.

 

[TaxmanHog]

I have a specific question about (Energy Credits Online portal) namely, what is that for?

Last year I filled out all the info when I did my taxes, I didn't use any such portal and received back the 30%.

I assumed I would do the same thing this year as I have more solar and energy star compliant purchases and just add the truck along with all of that.

The portal regards "Clean Vehicles" only, it is for the sellers (dealers) to access in reporting sales activity and claiming transferred credits.

You'll do what you normally do at filing time with regards to your SOLAR or EVSE equipment matters as reported on form 1040.

You'll also "reconcile" any credits regarding your vehicle purchase that occured 1/1/2025 to 9/30/2025 on form 1040 and related schedules.

 

[chl]

Must be a "written binding contract". That means that 99% of vehicle transactions before purchase don't qualify, because they aren't binding contracts. If you can walk, it's not binding.

No.

Vehicle sales contracts ARE considered legally binging contracts, at least in Virginia - probably is most or all states, I haven't checked.

One can always "walk away" from a vehicle sales contract, or any contract, but there may be or may not be consequences, i.e., damages for breaching which is what you are referring to by "walk away" I presume.

The buyer might forfeit your deposit for example depending on the terms, and it might depend on what state law says about that.

The question is did the contract "create a legal obligation for both parties to fulfill their respective duties." And in the case of vehicles sales contracts, the answer is YES.

In Virginia: "A contract is a legally binding agreement between parties that includes an offer, an acceptance of the offer, and consideration—the exchange of money, property, services, or some other promise to do or refrain from doing something."

So the down payment is the buyers consideration, the vehicle is the sellers - there is mutual "consideration" (a legal term for a thing or service, etc., of value).

The vehicle sales contract is predicated on an offer to sell a vehicle, or an offer to buy a vehicle, at a particular price, and an acceptance of that offer as evidenced by the signatures on the sales contract which will specify all the terms of the sale/purchase.

So if the dealership for example, does not provide the exact features specified in the contract, you have a remedy - likely some monetary compensation for the changed or left out feature. However, it may depend on the contract details. For example, substitution of an equivalent component may be an acceptable act.

A contract can provide for penalties/damages or not, if one of the parties does not go through with the sale/purchase/delivery, and still be "binding."

However to sue and get a judgement for a breach, there has to be some damages suffered by the non-breaching party. So if you walk away from a deal, was the dealership harmed, did it suffer any damages? Or was the deposit the liquidated damages for the breach of walking away?

And of course, you or the dealership can opt not to seek damages (return the deposit for example or accept the change in the vehicle feature), or state law might specify how that would work.

So, if in your state the vehicle sale contract is considered a binding contract, then you should meet that qualification of the IRS in their s-itty new rules under the Big Bugly Bill.
----
Disclaimer

I am an attorney licensed to practice law in Virginia.

However, the above should not be considered legal advice for your particular situation. You should therefore not rely on the above and instead consult competent legal representation in your state if you have a potential case or controversy needing resolution.

This is not a solicitation for legal representation.

The law can and does change over time as news laws are passed, new cases decided, etc.
So the above may include information about past results not guaranteeing future outcomes.

The above information is for general knowledge, not personalized legal advice, and does not create an attorney-client relationship or privilege.

The IRS or a competent tax attorney should be consulted and engaged for clarification of any IRS rule of regulation.

 

[MidAtlanticLightningClub]

Don't forget that the

Dealers must have been successfully registered for time of sale reporting and advance payment, as applicable, prior to or on the date of sale in order to submit the time of sale report. See Frequently asked questions about the New, Previously Owned and Qualified Commercial Clean Vehicles Credit: Topic I Q1.​

They must also submit the required form to IRS Energy Credits Online.

Report information to buyers​

For vehicles placed in service in 2024 or later, providing buyers a copy of the seller report submitted to IRS Energy Credits Online and the confirmation that the IRS accepted the submission meets your reporting obligation.​

​

For vehicles placed in service in 2023, you needed to provide the following information to buyers at the time of sale:​

​

• Seller/Dealer name and taxpayer ID number
  • Buyer's name and taxpayer ID number
  • Maximum credit allowable under IRC 30D for new vehicles or IRC 25E for previously owned vehicles
  • Vehicle identification number (VIN), unless the vehicle is not assigned one
  • Battery capacity
  • Date of sale
  • Sale price
  • For new vehicles, verification that the buyer is the original user

Each report must include a declaration of accuracy signed by a representative of your business with binding authority. The declaration must read: "Under penalties of perjury, I declare that I have examined this report submitted to the IRS pursuant to Revenue Procedure 2022-42 by [insert name of Seller], and to the best of my knowledge and belief I certify that this report is true, correct, and complete."​

​

Find more details in Rev. Proc. 2022-42, Submission of Information to IRS by Qualified Manufacturers of Clean Vehicles, Previously Owned Clean Vehicles, and Commercial Clean Vehicles; Submission of Information to IRS by Sellers of Clean Vehicles and Previously Owned Clean Vehicles and Rev. Proc. 2023-33, Transfer of Credit under Sections 30D and 25E from Taxpayer to Eligible Entity and Updated Requirements for Qualified Manufacturers and Sellers.​

 

[RickLightning]

From the IRS website, provided in 2022...

What is a written binding contract?
In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment. Putting down a $500 refundable deposit is not a binding contract. Note that the deposit must be SIGNIFICANT, and NON-REFUNDABLE.

Most people that order a vehicle do so with a non-binding agreement and a small deposit. They change their mind, and they get their money back. Dealer sells the car to someone else. Most car orders the dealership enters the info into a computer, prints it out with a price, takes a deposit ($500 or less), and orders the vehicle. That's an ORDER, not a binding contract. They get cancelled all the time.

In 2022, people rushed to get a binding contract in place to lock in the terms before the 2022 change went into effect. Some car makers (Rivian comes to mind) took steps to salvage orders enmasse).

If you Google you will see social media going crazy in 2022 for this exact issue. I believe there are threads here also on this topic.

 

[MidAtlanticLightningClub]

From the IRS website, provided in 2022...

What is a written binding contract?
In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment. Putting down a $500 refundable deposit is not a binding contract. Note that the deposit must be SIGNIFICANT, and NON-REFUNDABLE.

Most people that order a vehicle do so with a non-binding agreement and a small deposit. They change their mind, and they get their money back. Dealer sells the car to someone else. Most car orders the dealership enters the info into a computer, prints it out with a price, takes a deposit ($500 or less), and orders the vehicle. That's an ORDER, not a binding contract. They get cancelled all the time.

In 2022, people rushed to get a binding contract in place to lock in the terms before the 2022 change went into effect. Some car makers (Rivian comes to mind) took steps to salvage orders enmasse).

If you Google you will see social media going crazy in 2022 for this exact issue. I believe there are threads here also on this topic.

Also, the vehicle must be placed into service:

"Note: If a vehicle was not placed in service still within the 48 hours of the original time of sale submission Dealers and sellers should use the VOID option."
https://www.irs.gov/credits-deductions/clean-vehicle-credit-seller-or-dealer-requirements

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