The federal tax credit for a new electric vehicle is gone for anything bought after September 30, 2025, but if you acquired a qualifying EV on or before that date, you can still claim up to $7,500 on your 2025 federal return.1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One Big Beautiful Bill This applies whether you already received the credit as a price cut at the dealership or plan to claim it when you file.
Who Can Still Claim It
The One Big Beautiful Bill Act accelerated the end of the Section 30D clean vehicle credit. No credit is allowed for a vehicle acquired after September 30, 2025.1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One Big Beautiful Bill
The IRS treats a vehicle as “acquired” when you entered into a binding written contract and made a payment before the deadline, even if delivery came later.2Internal Revenue Service. Clean Vehicle Tax Credits The vehicle must be new (original use starts with you), for your personal use rather than resale, and used primarily in the United States.3Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
Income and Price Limits
Your modified adjusted gross income cannot exceed these thresholds. You can use the lower of your current-year or prior-year MAGI.3Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
- $300,000 for married filing jointly or a surviving spouse
- $225,000 for head of household
- $150,000 for all other filers
The vehicle’s manufacturer’s suggested retail price also has to fall inside a cap. Vans, SUVs, and pickup trucks cannot exceed $80,000. Sedans, hatchbacks, and coupes are capped at $55,000. The MSRP for credit purposes includes factory-installed options attached when the vehicle is delivered to the dealer but excludes destination charges, dealer add-ons, taxes, and registration fees.4Internal Revenue Service. Topic B – Frequently Asked Questions About Income and Price Limitations for the New Clean Vehicle Credit
How Much You Actually Get
The $7,500 maximum is really two separate $3,750 pieces tied to where the battery came from. Final assembly must occur in North America before any credit applies.5Office of the Law Revision Counsel. 26 U.S. Code 30D – Clean Vehicle Credit
The first $3,750 requires a set percentage of the battery’s critical mineral value to be extracted or processed in the U.S. or a free-trade partner, or recycled in North America. The threshold is 60 percent for vehicles placed in service in 2025 and 70 percent for 2026.5Office of the Law Revision Counsel. 26 U.S. Code 30D – Clean Vehicle Credit
The second $3,750 requires a percentage of battery component value to be manufactured or assembled in North America: 60 percent for vehicles placed in service in 2024 or 2025 and 70 percent for 2026.5Office of the Law Revision Counsel. 26 U.S. Code 30D – Clean Vehicle Credit A vehicle meeting only one test still gets $3,750. The battery also has to have at least 7 kilowatt-hours of capacity.3Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
A separate rule disqualifies any vehicle whose battery components were manufactured or assembled by a foreign entity of concern, and, for vehicles acquired after 2024, whose critical minerals were extracted, processed, or recycled by such an entity. The covered nations are China, Russia, Iran, and North Korea.6Congressional Research Service. Foreign Entity of Concern Requirements in the Section 30D Clean Vehicle Credit This is why many popular EVs qualify for only $3,750 or nothing at all.
Checking Your Specific Vehicle
You can’t work out battery sourcing on your own. The Department of Energy publishes an eligible-vehicle list at fueleconomy.gov showing whether each model qualifies for the full $7,500, a partial $3,750, or nothing.3Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After The list shifts as manufacturers change suppliers, so check it for the date the vehicle was placed in service, not the date you’re filing.
Point-of-Sale Discount vs. Credit on Your Return
If you transferred the credit to the dealer at purchase, the dealership already applied it to your price or down payment and got reimbursed by the government. One real advantage: a transferred credit is not clawed back if it exceeds your tax liability. You keep the full benefit even if you owed less tax than the credit was worth.7Internal Revenue Service. Topic H – Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit
If you didn’t transfer it, you claim it on your 2025 return. Claimed this way, the credit is nonrefundable. It reduces your federal tax dollar for dollar but only down to zero. Owe $5,000 in tax and qualify for $7,500? You save $5,000 and lose the other $2,500.
Filing Form 8936
Whether you transferred the credit or not, you have to file IRS Form 8936 (Clean Vehicle Credits) with Schedule A (Form 8936) on your federal return.8Internal Revenue Service. 2025 Instructions for Form 8936 People who already got the dealer discount often skip this step and run into problems with the IRS.
You’ll need the vehicle’s 17-character VIN, the year, make, and model, the date you placed it in service, and the credit amount. The dealer should have handed you a seller’s report at the sale confirming the vehicle was reported to the IRS, and that report has most of what the form asks for.9Internal Revenue Service. Clean Vehicle Credit Seller or Dealer Requirements Keep the seller’s report, purchase records, and your copy of Form 8936 for at least three years after filing.10Internal Revenue Service. Topic No. 305, Recordkeeping
When You Might Have to Pay It Back
If you took the credit at the dealership but your modified AGI for the year turns out to exceed the income limit, you owe the full credit back to the IRS on your return. The dealer isn’t responsible for verifying your income and isn’t on the hook.7Internal Revenue Service. Topic H – Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit
Being able to use the lower of your current-year or prior-year MAGI provides some cushion. But a large bonus, stock sale, or other windfall pushing you over in both years means reporting the repayment as additional tax. You still file Form 8936 to report the transfer even when repaying.7Internal Revenue Service. Topic H – Frequently Asked Questions About Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit
Used EV Credit
The Section 25E credit for previously owned clean vehicles ended on the same date and is not available for used EVs acquired after September 30, 2025.11Internal Revenue Service. Used Clean Vehicle Credit If you bought a qualifying used EV from a licensed dealer on or before that date, you can still claim up to $4,000 or 30 percent of the sale price, whichever is less.
The used rules are stricter. Sale price cannot exceed $25,000. The vehicle has to be at least two model years older than the calendar year you bought it. Each VIN can generate the credit only once in its lifetime. Income limits are lower:
- $150,000 for married filing jointly
- $112,500 for head of household
- $75,000 for all other filers
The same point-of-sale transfer option and repayment rules apply.11Internal Revenue Service. Used Clean Vehicle Credit
State Programs
Even with the federal credits gone for future purchases, some states run their own rebates or tax credits for EVs, ranging from nothing to a few thousand dollars. Many states also add annual registration surcharges on EVs to replace lost fuel-tax revenue. Check your state’s department of motor vehicles or energy office for current programs, since they change often and carry their own income and vehicle requirements.