Does the Ford Mach-E Still Qualify for the Tax Credit?

The Ford Mach-E tax credit is no longer available. The federal clean vehicle credit under Section 30D was terminated for any vehicle acquired after September 30, 2025, under the legislation known as the One, Big, Beautiful Bill signed into law on July 4, 2025.¹ And even before that cutoff, the Ford Mustang Mach-E had already lost eligibility for the purchase credit because of battery sourcing rules. If you buy or lease a Mach-E in 2026, no federal tax credit applies.

Why the Credit Is Gone for 2026 Buyers

The One, Big, Beautiful Bill eliminated the Section 30D new clean vehicle credit, the Section 25E previously owned clean vehicle credit, and the Section 45W commercial clean vehicle credit. All three stopped being available for vehicles acquired after September 30, 2025.¹ The IRS has updated its guidance to state that the credit “will not be allowed for any vehicle acquired after September 30, 2025.”²

None of the old eligibility rules matter for a 2026 purchase. There is no credit to qualify for, no income limit to meet, and no price cap to stay under. The statute itself has been closed off.

The Mach-E Was Already Disqualified From the Purchase Credit

Even while Section 30D was still active, the Mach-E did not qualify for the purchase credit. Starting January 1, 2024, any vehicle with battery components manufactured or assembled by a Foreign Entity of Concern became ineligible. A second restriction took effect January 1, 2025, disqualifying vehicles containing critical minerals extracted, processed, or recycled by such entities.³

Foreign Entities of Concern include companies headquartered in, incorporated in, or controlled by the governments of China, Russia, North Korea, or Iran.⁴ The Mach-E’s battery supply chain did not clear these sourcing restrictions, so the vehicle was ineligible for the Section 30D purchase credit throughout 2025.

The Lease Incentive Is Also Gone

Through 2024 and most of 2025, leasing was how Mach-E drivers accessed a $7,500 discount. Because the Mach-E did not qualify for the purchase credit, Ford’s finance division structured leases so that Ford, as the vehicle owner, claimed the Section 45W commercial clean vehicle credit and passed the savings on as a reduced lease cost. Section 45W had no battery sourcing or Foreign Entity of Concern restrictions, which is what made the workaround possible.⁵

That path is closed. Section 45W was terminated under the same legislation, with the same September 30, 2025 cutoff.¹ Ford canceled its EV leasing incentive program in October 2025. If you lease a Mach-E in 2026, neither you nor the leasing company will receive a federal tax credit on the transaction.

The Narrow Exception for Pre-Cutoff Acquisitions

One transition rule survives. If you signed a binding written contract and made a payment (including a nominal down payment or a vehicle trade-in) on or before September 30, 2025, the vehicle is treated as acquired on that date, and the credit can still be claimed even if you took delivery later.¹ Both pieces are required. A contract alone or a payment alone does not count.

The vehicle must also have independently qualified for the credit at the time of acquisition. For the Mach-E, the purchase credit was already unavailable because of battery sourcing, so the transition rule only helps Mach-E buyers who locked in a qualifying lease under Section 45W before the cutoff.

If You Already Received the Credit on a Mach-E Lease

If you acquired a qualifying vehicle on or before September 30, 2025, and placed it in service during the 2025 tax year, you file Form 8936 with your 2025 federal income tax return. This applies whether you plan to claim the credit on your return or you already received it as a point-of-sale transfer at the dealership.⁶ The form requires your vehicle identification number and the date you took possession.

The dealer was required to give you a copy of the seller report submitted through the IRS Energy Credits Online portal, along with confirmation that the IRS accepted it.⁷ You need that report to complete Form 8936. If you don’t have it, contact the dealership; without it, the credit cannot be claimed successfully.

Repayment Risks on a Point-of-Sale Transfer

If you transferred the credit to the dealer for an immediate price reduction, watch for situations that can force you to repay it when you file:

Your modified adjusted gross income exceeded the applicable threshold ($300,000 for joint filers, $225,000 for head of household, $150,000 for others) in both the delivery year and the preceding year. In that case, you must repay the full transferred credit amount on your return.⁶
The vehicle no longer meets eligibility requirements, which can trigger partial or full recapture.⁶
For a used clean vehicle, resale within 30 days of taking possession disqualifies the credit entirely.

One built-in protection of the point-of-sale transfer: the credit amount can exceed your actual tax liability for the year without triggering recapture, as long as you otherwise qualify.⁸ If you instead claim the credit on your return, note that it is non-refundable: it can reduce your tax bill to zero but cannot generate a refund, and any unused portion is lost rather than carried forward.⁶

Used Mach-E Buyers

The previously owned clean vehicle credit under Section 25E was terminated on the same date as the other credits.¹ Buying a used Mach-E from a dealer in 2026 brings no federal tax credit.

The same binding-contract-plus-payment transition rule applies to Section 25E, so a used-vehicle deal locked in on or before September 30, 2025 can still be claimed even if delivery came later.⁹

State and Local Programs Still Exist

Some state and local governments run their own EV incentive programs, which may include income tax credits, rebates, reduced registration fees, or sales tax exemptions. Eligibility rules, income limits, and credit amounts vary by jurisdiction. Check your state’s department of revenue or energy office for current programs.

Many states also charge an annual registration surcharge on electric vehicles to offset lost fuel tax revenue. These fees range from nothing in some states to over $200 per year in others. Factor that recurring cost into your ownership budget alongside any one-time state incentive.

1
Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21
2
Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
3
Federal Register. Clean Vehicle Credits Under Sections 25E and 30D – Transfer of Credits – Critical Minerals and Battery Components – Foreign Entities of Concern
4
Department of Energy. DOE Releases Final Interpretive Guidance on the Definition of Foreign Entity of Concern
5
Internal Revenue Service. Topic G – Frequently Asked Questions About Qualified Commercial Clean Vehicle Credit
6
Internal Revenue Service. Instructions for Form 8936 (2025)
7
Internal Revenue Service. Clean Vehicle Credit Seller or Dealer Requirements
8
Internal Revenue Service. Topic H – Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit
9
Internal Revenue Service. Used Clean Vehicle Credit