Sinology | Moment | Getty ImagesA federal tax break for consumers who buy or lease electric vehicles will disappear after Sept. 30.
However, consumers may have a little bit of wiggle room on that time frame, according to a new document released by the Internal Revenue Service.The tax credits, worth up to $7,500, were scrapped as part of a Republican tax and spending measure passed in July.
The law says consumers don't qualify for a tax break if the EV is "acquired after" Sept.
30.Some observers initially thought that meant an EV had to be "placed in service" by that date — meaning that consumers had to be in physical possession of the car.However, the IRS clarified that's not the case.watch now4:0604:06Tesla and Rivian are ly to push volumes this quarter as tax credit ends, says Barclay's Dan LevyThe ExchangeIf a taxpayer acquires an EV by having a "written binding contract in place" and makes a payment on or before Sept.
30, they'd be entitled to claim the federal tax credit when they eventually take possession of the vehicle — even if that's after Sept.
30, the IRS said in a set of answers to frequently asked questions issued Aug. 21."This means that if you can't drive off in the clean vehicle of your dreams by Sept.
30, there is still hope," said Ingrid Malmgren, senior policy director at Plug In America, a nonfit advocating for a quicker transition to electric cars.More from Personal Finance:What lower interest rates would mean for mortgage refinancingFew 401(k) rs use this option for tax-free growthWhy 'quiet cracking' at work is dangerousThe IRS applies to used, new and leased EVs, according to the IRS document.
They correspond with 25E, 30D and 45W of the tax code, respectively."You can order the vehicle from the dealer or manufacturer, sign the contract, put down a deposit by Sept.
30 and take possession of it later," Malmgren said.Making a payment might also mean making a vehicle trade-in, Malmgren said.Of course, the vehicle and consumer would still need to meet certain eligibility criteria to qualify for a federal tax credit.Consumers can still receive the tax credit as an instant rebate when taking possession of the vehicle, Malmgren said, instead of waiting to file their annual tax return next year.Aside from getting the money more quickly, there's an additional benefit: Consumers who choose to get the tax credit at the point of sale don't need to have a tax liability in order to get the funds.Taxpayers should ensure they get a time-of-sale report from the dealer when picking up their EV or within three days of picking it up, according to the IRS.Don’t miss these insights from CNBC What Nvidia's earnings mean for the stock market and AI tradeJosh Brown says if Apple announced a deal with Perplexity AI, the s would hit a recordChallenging Buffett: Buying wonderful companies at fair prices isn't more fitableBest Stocks: The value name with one of the best long-term charts Josh Brown has ever seen