How to Claim the $7,500 EV Tax Credit on Your Return

To claim the $7,500 EV tax credit, you file IRS Form 8936 (Clean Vehicle Credits) and its Schedule A along with your Form 1040 for the tax year you took delivery of the vehicle. That still holds for 2025 and 2026 returns, but only for buyers who acquired a qualifying vehicle on or before September 30, 2025. The One, Big, Beautiful Bill, signed July 4, 2025, ended the Section 30D new clean vehicle credit, the Section 25E used vehicle credit, and the Section 45W commercial credit for anything acquired after that date.¹

Who Can Still File for the Credit

Two situations keep the credit alive on a return you haven’t filed yet. First, you took delivery of a qualifying new clean vehicle on or before September 30, 2025. Second, you entered into a written binding contract and made a payment (a deposit or a trade-in counts) on or before September 30, 2025, even if the car didn’t arrive until later. Under IRS guidance, that contract-plus-payment combination counts as “acquired” before the deadline.¹

You claim the credit on the return for the year you place the vehicle in service, meaning the year you actually take possession. Sign the binding contract in September 2025, pick up the car in February 2026, and the credit belongs on your 2026 return filed in 2027.²

Confirm You Meet the Income and Price Limits

Before you fill out anything, check that you qualify. The IRS uses your modified adjusted gross income for either the year you took delivery or the year before, whichever is lower. The caps:³

$300,000 for married filing jointly or a qualifying surviving spouse
$225,000 for head of household
$150,000 for single filers and married filing separately

The vehicle’s manufacturer’s suggested retail price also has to sit under a cap that depends on how the IRS classifies it: $80,000 for vans, SUVs, and pickup trucks, and $55,000 for everything else, including sedans and hatchbacks.³ MSRP is base trim plus factory-installed options, but not destination charges or dealer markups. Some crossovers land right at the boundary between the two categories, and that classification decides which cap applies.

What You Need Before You File

Form 8936 and Schedule A ask for specific vehicle data. Have this in front of you:

The 17-character vehicle identification number (VIN)
The date you placed the vehicle in service (the day you took delivery, not the day you signed)
The make, model, and year, matching the IRS list of eligible vehicles
The dealer’s time-of-sale report. The seller was required to submit this to the IRS through the Energy Credits Online portal within three calendar days of your taking possession, listing the sale price, battery capacity, and your taxpayer ID number. You should have received a copy at the sale.⁴

If you don’t have the time-of-sale report, ask the dealer for a copy before you file. The IRS matches your Form 8936 against the dealer’s submission.

Filling Out Form 8936 and Schedule A

Attach Form 8936 and Schedule A to your Form 1040 for the year the vehicle was placed in service.⁵ Schedule A captures the per-vehicle details (VIN, in-service date, credit amount), and Form 8936 carries the total to your 1040.

The credit reduces your federal tax liability dollar for dollar, and it is nonrefundable. It can take your tax bill down to zero but won’t push you into a refund beyond that. There is no carryforward. If you owe $5,000 in federal tax and qualify for the full $7,500, you use $5,000 and lose the other $2,500 entirely.⁵ That math matters when you decide whether to claim it on your return or, for a 2025 purchase, whether you already took it at the dealer.

The full $7,500 is really two $3,750 pieces tied to where the battery’s critical minerals were sourced and where its components were manufactured. A vehicle meeting only one test qualifies for $3,750; meeting neither, zero. The vehicle also needs a battery of at least 7 kilowatt-hours and final assembly in North America.² Manufacturers self-certify against those sourcing thresholds, so the credit amount on your time-of-sale report already reflects that determination. You aren’t calculating those percentages yourself.

If You Already Took the Credit at the Dealer

Since 2024, buyers have had the option to transfer the credit to the dealer at the point of sale in exchange for an immediate price reduction of up to $7,500. The dealer submitted your information through the IRS Energy Credits Online portal.⁴

Taking the credit at the dealer does not remove the filing step. You still have to file Form 8936 and Schedule A with your return for the year the vehicle was placed in service. The form reconciles the advance you got at the dealer against your actual eligibility.⁵ The transfer election, once made, is irrevocable. You cannot decide later to claim the credit on the return instead.

When You Have to Repay the Credit

If you transferred the credit to the dealer and later turn out to be ineligible, the IRS collects from you, not the dealer. The most common trigger is exceeding the income limits, often because a late-year bonus or capital gain pushed your modified adjusted gross income above the threshold you had expected to stay under.⁶

The repayment is reported on Form 8936 as an addition to your tax for the year the vehicle was placed in service. The IRS is explicit that you should not try to settle up with the dealer directly; the money goes back through your return.⁶ If you didn’t transfer the credit and you’re over the income limit, the credit simply doesn’t apply on your return.

Claiming the Used EV Credit

The used clean vehicle credit under Section 25E is claimed on the same Form 8936 and Schedule A, for the year the vehicle was placed in service. It was worth up to $4,000, or 30% of the sale price, whichever was less. It was terminated on the same September 30, 2025 date, and the same binding-contract-plus-payment rule preserves eligibility for buyers who acquired before the deadline.¹

The used credit has different rules you need to confirm before filing:⁷

Sale price of $25,000 or less
Income limits of $150,000 joint, $112,500 head of household, $75,000 all others
Model year at least two years older than the calendar year of purchase
Purchased from a licensed dealer, not a private party
One used-vehicle credit per buyer in any three-year period

It is also nonrefundable with no carryforward, and the dealer-transfer recapture rules work the same way as on the new-vehicle credit.⁵

A Note on Leases and Commercial Vehicles

The Section 45W commercial clean vehicle credit, which leasing companies had used to reduce lease payments on EVs that didn’t meet the Section 30D sourcing rules, was terminated by the same law on the same date.¹ A new lease signed in 2026 on a vehicle acquired after September 30, 2025, carries no federal EV credit for the leasing company to pass through, and nothing for you to claim on your own return.

1
Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One, Big, Beautiful Bill
2
Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
3
Office of the Law Revision Counsel. 26 USC 30D – Clean Vehicle Credit
4
Internal Revenue Service. Clean Vehicle Credit Seller or Dealer Requirements
5
Internal Revenue Service. Instructions for Form 8936 (2025)
6
Internal Revenue Service. Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit
7
Internal Revenue Service. Used Clean Vehicle Credit