Federal Electric Vehicle Tax Credit: September 30 Cutoff and Amount

The federal electric vehicle tax credit ended for vehicles acquired after September 30, 2025, when the One Big Beautiful Bill Act terminated Section 30D along with the used and commercial clean vehicle credits.¹ If you signed a binding purchase contract and made a payment on or before that date, you can still claim up to $7,500 on your 2025 return, even if delivery happened later. For anyone shopping in 2026, no federal credit is available at purchase.

What the September 30 Cutoff Actually Means

The termination applies to vehicles acquired after September 30, 2025. The IRS treats a vehicle as acquired when you enter into a binding written contract and make a payment, which can be a nominal down payment or a trade-in.² Delivery date does not control eligibility. If you signed the paperwork and put money down in September but the car arrived in November or December, you are still in.

You claim the credit for the tax year the vehicle was placed in service, meaning the year you actually took possession.³ A September 2025 contract with December 2025 delivery goes on your 2025 return filed in 2026. The same cutoff applies to the used clean vehicle credit under Section 25E and the commercial credit under Section 45W.⁴

Which Vehicles Qualify

The manufacturer’s suggested retail price cannot exceed the cap for the vehicle’s classification: $80,000 for vans, SUVs, and pickup trucks, and $55,000 for sedans and other vehicle types.⁵ Classification comes from the fuel economy label and the EPA size class posted on FuelEconomy.gov, not from how the vehicle is marketed.⁶ Some crossovers that look like SUVs are classified as sedans, which drops the ceiling by $25,000.

The vehicle must also have final assembly in North America, a battery capacity of at least 7 kilowatt-hours, a gross vehicle weight rating under 14,000 pounds, and come from a qualified manufacturer.³ You can confirm assembly location using the vehicle identification number against the Department of Energy’s decoder tool or the label on the driver-side door jamb.

Battery sourcing rules further narrow eligibility. Starting in 2024, vehicles with battery components made or assembled by a foreign entity of concern were disqualified. In 2025 the same rule extended to critical minerals extracted, processed, or recycled by such an entity.⁷ The covered countries are China, Russia, Iran, and North Korea. These restrictions significantly shortened the list of qualifying vehicles in 2025. Check the specific vehicle on fueleconomy.gov to see what credit amount, if any, it qualified for.

Income Limits

Your modified adjusted gross income must fall below the applicable threshold:

Married filing jointly or surviving spouse: $300,000
Head of household: $225,000
All other filers: $150,000

A look-back rule gives you two shots. You may use either your income for the year the vehicle was placed in service or the prior year, whichever is lower.⁶ If either year is under the limit, you qualify. If both years are over, you cannot claim the credit.

How Much the Credit Is Worth

The maximum is $7,500, split into two independent halves of $3,750. One half is tied to critical mineral sourcing; the other to battery component manufacturing.⁵ Many vehicles qualified for only one half because they satisfied one test but not the other.

The credit is nonrefundable. It reduces your federal income tax liability dollar-for-dollar, but any amount larger than your tax bill is lost. If you owe $5,000 in federal income tax and the credit is $7,500, you save $5,000 and forfeit the remaining $2,500. For personal-use vehicles, the unused portion cannot be carried forward.⁸

If You Took the Credit at the Dealership

Many buyers transferred the credit to the dealer at purchase and received an instant discount instead of waiting to file. The transferred amount could exceed your actual tax liability for the year without triggering recapture, so the transfer effectively worked like a refundable credit even though the credit itself is not.⁹

Repayment is triggered by one thing: exceeding the income limits. If you transferred the credit but your modified adjusted gross income for both the delivery year and the prior year was over the applicable threshold, you owe the transferred amount back as additional tax on your return.⁹ You do not repay the dealer. The amount shows up as an addition to tax on your 1040. The dealer had no obligation to verify your income and bears no liability.

Filing on Your 2025 Return

You need two documents: the seller report from the dealership and IRS Form 8936. The dealer was required to submit the sale to the IRS through the Energy Credits Online portal within three calendar days of delivery and to give you a copy.¹⁰ Without that report the vehicle does not qualify. If you never received it, contact the dealership before filing.

Form 8936 captures the vehicle identification number, the date placed in service, and whether you transferred the credit at the point of sale.¹¹ Even if you already received the discount at the dealership, you still have to file Form 8936 with your 1040 to reconcile the transaction. The VIN on your form must match the seller report exactly; mismatches flag the return for review.

The Used EV Credit

The previously owned clean vehicle credit under Section 25E also ended for vehicles acquired after September 30, 2025.¹² If you bought a qualifying used EV from a licensed dealer on or before that date, you can still claim it on your 2025 return using Form 8936. The rules were tighter than for new vehicles:

Credit amount: 30 percent of the sale price, capped at $4,000
Sale price could not exceed $25,000, including dealer fees not required by law but excluding taxes and title
Vehicle had to be at least two model years older than the calendar year of purchase
Income limits: $150,000 married filing jointly, $112,500 head of household, $75,000 all others
Purchase had to go through a licensed dealer who reported the sale to the IRS

Private-party sales never qualified. The same look-back rule applied for income.¹²

Leased Vehicles

Leases worked differently. The leasing company claimed the credit under Section 45W, the commercial clean vehicle credit, and often passed the savings through as a reduced monthly payment. Section 45W did not impose the North American assembly requirement, the price caps, the income limits, or the foreign entity of concern restrictions, so vehicles that failed Section 30D could still generate a credit through a lease.¹³

Section 45W was also terminated for vehicles acquired after September 30, 2025. If you signed a lease on or before that date, the leasing company claims the credit and any pass-through should already be reflected in your lease terms. Nothing goes on your personal tax return.

1
Office of the Law Revision Counsel. 26 U.S. Code 30D – Clean Vehicle Credit
2
Internal Revenue Service. 2025 Instructions for Form 8936
3
Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
4
Internal Revenue Service. Clean Vehicle Tax Credits
5
Office of the Law Revision Counsel. 26 U.S.C. 30D – Clean Vehicle Credit
6
Internal Revenue Service. Topic B – Frequently Asked Questions About Income and Price Limitations for the New Clean Vehicle Credit
7
Department of Energy. DOE Releases Final Interpretive Guidance on the Definition of Foreign Entity of Concern
8
Internal Revenue Service. Topic A – Frequently Asked Questions About the Eligibility Rules for the New Clean Vehicle Credit Under 30D Effective Jan. 1, 2023
9
Internal Revenue Service. Topic H – Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit
10
Internal Revenue Service. Clean Vehicle Credit Seller or Dealer Requirements
11
Internal Revenue Service. About Form 8936, Clean Vehicle Credit
12
Internal Revenue Service. Used Clean Vehicle Credit
13
Office of the Law Revision Counsel. 26 U.S. Code 45W – Credit for Qualified Commercial Clean Vehicles