The federal clean vehicle tax credit ended for any vehicle acquired after September 30, 2025. If you signed a binding written contract and made a payment on or before that date, you can still claim the credit on your tax return, even if the car was delivered later. If you’re shopping now, there is no federal credit available on the purchase, though a home charger credit and various state programs remain.
The credit was created by the Inflation Reduction Act in 2022 and was originally scheduled to run through 2032. Public Law 119-21, the “One, Big, Beautiful Bill Act,” signed by President Trump on July 4, 2025, moved the expiration date up to September 30, 2025 for all three federal clean vehicle credits: the new vehicle credit under Section 30D, the used vehicle credit under Section 25E, and the commercial vehicle credit under Section 45W.1IRS. Clean Vehicle Tax Credits2Miller Kaplan. The OBBBA Will Soon Eliminate Certain Clean Energy Tax Incentives
What Counts as “Acquired by September 30, 2025”
Under IRS guidance, a vehicle is considered acquired when a binding written contract is signed and a payment is made. The payment can be a nominal down payment or a trade-in. Physical delivery is not the trigger. A buyer who put money down and signed the contract on September 30 but picked up the car in October is still eligible.3IRS. FAQs for Modification of Sections Under Public Law 119-21
New dealer registration in the IRS Energy Credits Online portal closed on September 30, 2025. Dealers already registered can still submit time-of-sale reports for vehicles acquired on or before that date.3IRS. FAQs for Modification of Sections Under Public Law 119-21
How Much the Credit Is Worth
New Vehicles (Section 30D)
Up to $7,500 for a qualifying new electric vehicle, plug-in hybrid, or fuel cell vehicle. The amount split into two halves of $3,750: one for meeting critical mineral sourcing rules, one for meeting battery component manufacturing rules. Vehicles had to be assembled in North America and stay under manufacturer’s suggested retail price caps of $55,000 for sedans and $80,000 for vans, SUVs, and pickup trucks.4Alternative Fuels Data Center. Federal Tax Credit for New Clean Vehicles5U.S. Department of the Treasury. Treasury and IRS FEOC NPRM for Clean Vehicle Credit
Used Vehicles (Section 25E)
30% of the sale price, capped at $4,000. The vehicle’s sale price could not exceed $25,000, and its model year had to be at least two years older than the year of purchase. The battery had to be at least seven kilowatt-hours, and gross vehicle weight had to be under 14,000 pounds. The car had to come from a licensed dealer, and a buyer can only claim one used clean vehicle credit every three years.6IRS. Used Clean Vehicle Credit
Commercial Vehicles (Section 45W)
Businesses and tax-exempt organizations could claim the lesser of the vehicle’s incremental cost over a comparable gas or diesel model, or a percentage of its basis: 30% for fully electric and fuel cell vehicles, 15% for plug-in hybrids. The maximum was $7,500 for vehicles under 14,000 pounds and $40,000 for heavier vehicles. This credit is part of the general business credit and could not be transferred to a dealer.7U.S. Department of the Treasury. Qualified Commercial Clean Vehicle Credit Final Rule8Wolters Kluwer. Clean Vehicle Credits After OBBBA
Income Limits
For the new vehicle credit, modified adjusted gross income had to stay under $300,000 for joint filers, $225,000 for heads of household, and $150,000 for all other filers.9IRS. Instructions for Form 8936
For the used vehicle credit, the limits are lower: $150,000 for joint filers, $112,500 for heads of household, and $75,000 for other filers. You can use the lower of the current or prior year’s income to qualify.6IRS. Used Clean Vehicle Credit
Claiming the Credit on Your Return
File Form 8936 with your tax return, along with Schedule A (Form 8936). You need a separate Schedule A for every vehicle. This applies whether you took the credit at the dealership as a point-of-sale reduction or you’re claiming it on your return.9IRS. Instructions for Form 8936
If you transferred the credit to the dealer at purchase, the forms reconcile the advance payment against your actual eligibility. The credit for personal-use vehicles cannot be carried forward or backward, so any portion exceeding your tax liability for the year is lost.9IRS. Instructions for Form 8936
What Happens If You Took the Credit at the Dealer but Don’t Qualify
If your income exceeds the applicable limit, the full advance payment must be repaid to the IRS as an addition to tax for the year the vehicle was placed in service. You repay the IRS, not the dealer. Dealers generally do not have to return advance payments when a buyer turns out to be ineligible, though they do have to repay if the sale is canceled or the vehicle is returned within 30 days.10IRS. FAQs About Transfer of Clean Vehicle Credits
This is worth checking carefully if your 2025 income is close to the threshold. A bonus, a stock sale, or a filing-status change can push you over and turn a $7,500 discount at the dealership into $7,500 owed at tax time.
Home EV Charger Credit Runs a Little Longer
The alternative fuel vehicle refueling property credit, which covers home EV charger installation, was not cut off on September 30, 2025. It remains available for property placed in service on or before June 30, 2026.3IRS. FAQs for Modification of Sections Under Public Law 119-21 If you took delivery of an EV in the final weeks of eligibility and are installing charging equipment now, this credit is a separate line item worth confirming with your installer.
State Programs Still Available
With the federal credit gone, state incentives are what remain. Programs vary widely, and several are income-restricted or capped at a fixed number of rebates per year.
- California – Clean Cars 4 All. A scrap-and-replace program for lower-income residents in five participating air districts. In the Bay Area, grants range from $9,500 to $12,000 depending on the replacement vehicle and whether the buyer lives in a disadvantaged community.11BAAQMD. Clean Cars for All Eligibility
- Colorado – Vehicle Exchange Colorado. An income-qualified rebate offering up to $9,000 for a new EV and $6,000 for a used EV as of November 2025, with about $25.6 million in funding. A trade-in of an older or high-emitting vehicle is required. Colorado also has separate state EV tax credits running through 2028.12Colorado Energy Office. Vehicle Exchange Colorado FAQ13Alternative Fuels Data Center. Colorado Electric Vehicle Tax Credits
- Pennsylvania. Rebates of $3,000 for battery electric vehicles and $1,500 for plug-in hybrids, with a $1,000 low-income bonus. Vehicles must cost $45,000 or less, and household income cannot exceed 300% of the federal poverty level. The program is limited to roughly 500 rebates per year. Pennsylvania also implemented an annual road user charge for EV owners effective April 2025.14Pennsylvania DEP. Alternative Fuel Vehicle Rebates for Consumers
- Massachusetts – MOR-EV. Rebates for the purchase or lease of new or used battery electric and fuel cell vehicles, with additional amounts for income-qualifying residents.15Massachusetts.gov. State and Federal Electric Vehicle Funding Programs
- New Jersey – Charge Up New Jersey. Up to $1,500 for a new all-electric vehicle, or up to $4,000 for income-qualifying residents. EV owners also get a 10% E-ZPass discount on off-peak New Jersey Turnpike and Garden State Parkway tolls and HOV lane access regardless of passenger count.16New Jersey DEP. Affordability Incentives
- Washington. A state sales tax exemption for electric vehicles. A prior instant rebate program for low-income buyers closed in October 2024 after assisting more than 6,100 people and may reopen if the legislature funds it again.17Washington State Climate. Save Money Rebate and Incentive Programs
Some states without a rebate program have added registration surcharges or annual road-use fees for EVs to replace lost gas tax revenue, so the net cost picture depends on where the vehicle will be registered.