Under the One Big Beautiful Bill Act signed into law on July 4, 2025, the federal government now charges an annual registration fee for electric vehicles: $200 per year for fully electric vehicles and $100 per year for hybrids, collected through your state DMV alongside your regular registration. The same law ended the federal clean vehicle tax credits for any EV acquired after September 30, 2025, so a vehicle purchased in 2026 no longer qualifies for the $7,500 new-car credit or the $4,000 used-car credit.
How Much the Federal EV Fee Is and How You Pay It
The fee sits in 23 U.S.C. ยง180 and is remitted to the Federal Highway Administration. Amounts break down by vehicle type:
- Fully electric vehicles: $200 per year, effective on enactment.
- Hybrid vehicles: $100 per year, effective on enactment.
- All other motor vehicles: $20 per year, starting October 1, 2030.
The amounts adjust annually for inflation using the Consumer Price Index. Commercial motor vehicles and farm-use vehicles are excluded. Under the reconciliation framework the law was passed through, collections on EVs and hybrids are set to expire on October 1, 2035.
You will not receive a separate federal bill. Your state DMV handles billing through its existing registration process, and the fee appears as an additional line item on your annual renewal notice.
State EV Surcharges Stack on Top
The new federal charge is added to state-level EV fees that most owners already pay. At least 41 states impose a special annual registration fee on electric vehicles, ranging from roughly $50 to $290 depending on the state. Those surcharges exist because EVs do not generate fuel tax revenue that funds road maintenance, so states created a flat annual fee as a substitute. Combined with the new federal charge, an EV owner in a high-surcharge state can pay close to $500 per year in registration-related fees beyond what a conventional vehicle owner pays.
Federal EV Tax Credits Ended After September 2025
The same legislation that created the registration fee also terminated the three federal EV tax credits. The New Clean Vehicle Credit (Section 30D), the Previously Owned Clean Vehicle Credit (Section 25E), and the Qualified Commercial Clean Vehicle Credit (Section 45W) are all unavailable for vehicles acquired after September 30, 2025.1Internal Revenue Service. Clean Vehicle Tax Credits No federal tax credit exists for a new or used EV purchased in 2026.
Before termination, Section 30D offered up to $7,500 for new EVs, split between a $3,750 critical minerals component and a $3,750 battery component requirement.2Office of the Law Revision Counsel. 26 US Code 30D – Clean Vehicle Credit Section 25E covered 30% of a used EV’s sale price, up to $4,000, for vehicles priced at $25,000 or less and sold by an IRS-registered dealer.3Office of the Law Revision Counsel. 26 USC 25E – Previously-Owned Clean VehiclesCommercial Clean Vehicle Credit All three are gone for new acquisitions.
If You Bought Before October 1, 2025
If you purchased an EV before October 1, 2025, you can still claim the applicable credit on your 2025 return even if you do not take delivery until sometime in 2026. The IRS interprets “acquired” to mean “paid for,” so a binding written contract combined with a payment made on or before September 30, 2025 preserves your eligibility regardless of when the vehicle actually arrives.1Internal Revenue Service. Clean Vehicle Tax Credits You place the vehicle in service when you physically take possession, and you claim the credit for the tax year in which that happens.
This distinction matters if you ordered a vehicle with a long production queue. A deposit alone without a binding contract likely will not qualify, so check whether your purchase agreement constitutes a binding commitment under its terms. Keep the signed contract, payment receipt, and delivery records, because the IRS needs to see that both the agreement and payment preceded the October cutoff.
The original eligibility rules still apply in full to those pre-cutoff purchases. Modified adjusted gross income for the new-vehicle credit cannot exceed $300,000 for joint filers, $225,000 for head-of-household filers, or $150,000 for other filing statuses, and you can use whichever is lower between your income for the year the vehicle was placed in service and the preceding year.4Internal Revenue Service. Topic B – Frequently Asked Questions About Income and Price Limitations for the New Clean Vehicle Credit Vans, SUVs, and pickups cannot have an MSRP above $80,000; sedans and other passenger vehicles are capped at $55,000. The used-vehicle credit uses tighter income thresholds of $150,000, $112,500, and $75,000.5Office of the Law Revision Counsel. 26 USC 25E – Previously-Owned Clean Vehicles
If you acquired an eligible clean vehicle in 2025, you need to file Form 8936 with your federal tax return, even if the credit was already transferred to a dealer at the point of sale.6Internal Revenue Service. Instructions for Form 8936 The form captures the vehicle identification number and credit amount, and the IRS cross-references it against the seller report the dealership submitted through the Energy Credits Online portal. Skipping the form creates a mismatch in IRS records that can trigger a notice.
One trap for buyers who took the credit as a point-of-sale discount: if your actual income for the tax year exceeded the limit, you owe the credit back to the IRS when you file.7Internal Revenue Service. Topic H – Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit The transfer advanced the money; the return is where eligibility is verified. If your tax liability was less than the credit amount, however, you do not have to repay the difference.
The Home Charger Credit Still Exists
One federal EV benefit survived. The Alternative Fuel Vehicle Refueling Property Credit under Section 30C lets you claim 30% of the cost of a home EV charger, up to $1,000 per charging port, for property placed in service before June 30, 2026.8Internal Revenue Service. Alternative Fuel Vehicle Refueling Property Credit Businesses can claim up to $100,000 per unit at a 6% base rate.
There is a geographic catch. Your property must sit in a qualifying census tract, defined as a low-income community or non-urban area. The IRS provides a lookup tool using 2020 census tract boundaries for property placed in service after January 1, 2025.8Internal Revenue Service. Alternative Fuel Vehicle Refueling Property Credit If your home is not in an eligible tract, you do not qualify no matter what you spent. Check the IRS census tract identifier before buying equipment, because the requirement rules out many suburban and urban homeowners who would otherwise assume they are covered.