Buying an electric vehicle is supposed to be easier and cheaper than ever. There’s new tax credits and new incentives — many of them created by the Inflation Reduction Act two years ago. But despite all the new policies, the reality of buying an EV can be a little more complicated.
In June 2023, I bought a used plug-in hybrid. It was the first year car owners could get tax credits for a used electric vehicle, up to $4,000.
I pretty obsessively researched this car; I wanted to make sure it met the long list of IRS requirements. In my case, I qualified for about a $2,800 dollar rebate.
So I filled out some paperwork, the dealer filled out some paperwork and several months later I filed my taxes.
Then I got a letter from the IRS telling me they'd disallowed all $2,807 of the credits I'd claimed for the car. The letter said the vehicle's VIN number didn't match their records.
I wrote back disputing the IRS. I still haven't heard anything.
But this tax credit was the reason I the car; it made it cheaper than buying another similar used car. So, I went to an online forum for EVs. And I saw I wasn’t the only one having this problem.
"This was certainly not the only case, but this was not, as far as I know, a super common case," said Albert Gore, with the Zero Emission Transportation Association. It's an organization that pushed for EV adoption.
Gore says others and I have had a tough time getting this credit likely because of the newness of the program. 2023 was the first year the credit was available, and that whole year, nothing was really formalized or streamlined.
When I bought my car, the dealership hadn’t even heard of the credit. The IRS had no official forms or reporting software. I knew I had to submit certain information to the IRS and the dealership was supposed to do the same.
That’s not the case anymore. In early 2024, the IRS rolled out a point-of-sale rebate program that allows the dealer to give buyers the credit right there on the spot.
"[Instead of] something that is dependent on a dealer's word or an IRS process later or the following calendar year, but something that is taken off the price of the vehicle right there at the dealership," said Gore.
But pretty much everyone who bought a used EV in 2023 missed out on that point-of-sale program.
"You were an early adopter but [you got] caught up a little bit in the newness of this industry," said Anne Blair with the Electrification Coalition, another non-profit that works on EV adoption.
Blair says I likely fell through a very narrow gap between when a policy like this is passed and when it’s actually implemented.
"I think in some ways we have to expect a few of these issues," she said. "But I know it can be very frustrating for consumers as we evolve into this new electrification transportation future."
That doesn’t necessarily mean I won’t get my tax credit. If it turns out the dealer didn’t submit the paperwork, I could try and file a business complaint, which could help my case.
Plus, I’m still waiting to hear back from the IRS on my dispute letter.
EV technology may be the future, but when it comes to getting a brand new federal tax credit, well, snail mail is still alive and well.
