No longer eligible for Clean Vehicle Tax Credit, what do I do now?

[JeffreySneezos]

Long story short:

• Due to an employment gap last year, I thought my MAGI was below the threshold for the used clean vehicle credit.
• Unfortunately, I did a Traditional IRA to Roth IRA conversion in 2024, which if I understand correctly, makes my AGI/MAGI higher for that FY, pushing me out of qualifying for the credit. (Is this correct? the traditional IRA came from my old employer's 401K match; all my own contributions were Roth 401K).
• I got the credit at the dealership and it applied to the purchase price of my vehicle.
• I purchased the vehicle in 2025 (this year). I'm pretty certain my AGI/MAGI this year won't be low enough to qualify. I'll be tens of thousands higher than the threshold.
• I'm now wondering what to do. I'm using TurboTax Desktop, and want to get this reconciled. How would I pay the IRS back? What forms would I need to fill out?

[SusanY1]

Since you purchased the vehicle in 2025, you will reconcile this on your 2025 tax return.  When you reconcile the credit there - you'll tell TurboTax that you purchased the vehicle and provide information such as the date of the purchase and the Vehicle Identification Number (VIN) and indicate that you transferred the credit to the dealership. 

TurboTax will create the proper forms related to the credit, and add any credit that you must repay to your total tax due.  This will either increase what you have to pay to the IRS or reduce any refund due to you.