The IRS issued updated FAQs addressing issues related to the early termination of various energy incentives under the One Big, Beautiful Bill Act (OBBBA; P.L. 119-21). (FS-2025-05)
OBBBA terminates all three clean vehicle credits for vehicles acquired after September 30, 2025. The IRS’s FAQs define the term “acquired” to mean that the taxpayer has entered into a binding written contract to purchase a qualifying vehicle and made a payment. A payment can include a nominal downpayment or a vehicle trade-in. As long as the taxpayer has acquired a qualifying vehicle under this definition, then the taxpayer can claim a clean vehicle credit even if they take delivery of the vehicle after September 30, 2025.
OBBBA terminates the Residential Clean Energy Credit under IRC §25D (solar, etc.) with respect to any expenditures made after December 31, 2025. Many people have taken the language of OBBBA to mean that a taxpayer can pay for their residential clean energy project by December 31 and still claim a credit if the project is completed after December 31, 2025. The IRS’s FAQs lay waste to this claim by pointing out that IRC §25D(e)(8) was left unchanged by OBBBA. That section provides that all expenditures with respect to a residential clean energy project are deemed paid when the original installation of the project is completed.
For car dealers, new user registrations for the IRS’s Energy Credit Online portal will close on September 30, 2025. The portal will remain open after that day 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.
Sign up for Spidell’s 2025/2026 Federal and California Tax Update webinar and get details on OBBBA’s many tax provisions. Click here and register today.
Sign up for Spidell’s Flash E-mail — Get breaking news delivered to your inbox, plus other free analysis and information for tax professionals. Join our community and stay at the top of your game. Click here to sign up.
