Tax Incentives for Electric Vehicle Adoption: Deadlines and Claims

The federal electric vehicle tax credit ended for vehicles acquired after September 30, 2025. If you took delivery on or before that date, you can still claim up to $7,500 on a new EV or up to $4,000 on a used one when you file your 2025 return.¹ After the cutoff, the only EV-related federal incentive still on the books is a credit for charging equipment, and that one expires June 30, 2026.²

The September 30, 2025 Cutoff

The One Big Beautiful Bill Act, signed into law in July 2025, terminated three clean vehicle credits at once, all effective for vehicles acquired after September 30, 2025: the Section 30D credit for new EVs (up to $7,500), the Section 25E credit for used EVs (up to $4,000), and the Section 45W commercial credit (up to $7,500), which leasing companies had been using to reduce monthly payments on leased consumer EVs.³

The date that matters is when you acquired the vehicle, not when you ordered or paid a deposit. If delivery slipped past September 30, no credit is available to you or, in the case of a lease, to the leasing company that would have shared it with you.

New EV Credit on Your 2025 Return

If you acquired a qualifying new EV or plug-in hybrid on or before September 30, 2025, the Section 30D credit is worth up to $7,500, split into two $3,750 components.⁴ One component requires that a set percentage of the battery’s critical minerals were extracted or processed in the United States or a free-trade partner. The other requires that a set percentage of battery components were manufactured or assembled in North America. A vehicle can meet one, both, or neither. Final assembly in North America was required in all cases, and the battery had to have a capacity of at least 7 kilowatt-hours.⁵

Price caps applied by vehicle type. Vans, SUVs, and pickup trucks had to carry an MSRP of $80,000 or less. Every other vehicle type, including sedans, was capped at $55,000.⁶

Income limits applied to modified adjusted gross income for either the year you placed the vehicle in service or the prior year, whichever was lower:⁶

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

A vehicle could also be disqualified because of where its battery came from. If any minerals were extracted or processed by a prohibited foreign entity, or any components manufactured or assembled by one, the vehicle dropped off the eligibility list. The One Big Beautiful Bill Act broadened the earlier “foreign entity of concern” rule, so the IRS’s approved-vehicle database is the reliable source. If a model is on that list for your acquisition date, it qualifies; if not, it doesn’t.

Used EV Credit on Your 2025 Return

The Section 25E used-vehicle credit is worth 30% of the sale price, capped at $4,000, for a qualifying vehicle bought from a licensed dealer on or before September 30, 2025.⁷ The requirements:

Sale price of $25,000 or less
Model year at least two years older than the calendar year of purchase
Battery capacity of at least 7 kilowatt-hours
Purchase from a licensed dealer (private-party sales never qualified)
First qualified transfer since August 16, 2022⁸

Income limits ran lower than for new vehicles:⁷

Married filing jointly: $150,000 or less
Head of household: $112,500 or less
All other filers: $75,000 or less

You can only claim the used credit once every three years. If you claimed it on a 2023 purchase, you were ineligible in 2024 and 2025.⁷ The credit is also nonrefundable: it can zero out your federal tax bill but cannot generate a refund beyond that, and any excess is lost rather than carried forward.⁸

How to Claim It

File Form 8936 (Clean Vehicle Credits) along with Schedule A (Form 8936) with your federal return for the year you took delivery.⁵ File it even if you transferred the credit to the dealer and already received the discount at purchase; the IRS uses the form to reconcile the transferred amount against the seller’s report.

You’ll need the vehicle’s 17-character VIN, which appears on the driver’s side dashboard and the door jamb. The dealer had to give you a copy of the time-of-sale report and file the same information with the IRS through the Energy Credits Online portal.⁹ If the dealer never submitted that report, the vehicle is not eligible for the credit no matter how well it otherwise qualifies.⁵ Contact the dealer before you file if you’re unsure.

If You Already Got the Discount at the Dealership

Starting in 2024, buyers could transfer the credit to the dealership and receive an immediate price reduction rather than wait for tax season. The dealer used the Energy Credits Online portal to process the transfer and collect an advance payment from the IRS.⁹

The dealer did not verify your income. The transfer relied on your self-attestation. If your modified adjusted gross income exceeded the threshold in both the delivery year and the prior year, you didn’t actually qualify, and the transferred amount is added to your gross income on your 2025 return, effectively increasing the tax you owe. The dealer keeps the advance payment. The IRS collects from you. This matters most for filers whose income moved above the ceiling in 2024 and stayed there in 2025.

Mistakes That Void the Credit

A few errors will disqualify an otherwise valid claim.

Selling a new EV within 30 days of taking possession voids the Section 30D credit. If you transferred it to the dealer, the IRS collects the transferred amount from you, and the vehicle becomes permanently ineligible for any future buyer.

Buying a used EV from a private seller never qualified. The purchase had to go through a licensed dealer, regardless of how well the vehicle itself met the other rules.⁷

A missing seller report sinks the claim. Both the new and used credits required the dealer to register with the IRS and file a time-of-sale report electronically.¹⁰ Without it, the IRS has no record linking your purchase to the vehicle, and the credit is denied.

And the personal-use credit is nonrefundable. If you owed $3,000 in federal tax and qualified for a $7,500 credit, you got $3,000 in benefit. The rest disappeared.⁸ It doesn’t carry forward.

The Charging Equipment Credit Through June 2026

The Section 30C alternative fuel vehicle refueling property credit is the only EV-related federal incentive still available for new installations, and it expires for property placed in service after June 30, 2026.²

For individuals, the credit covers 30% of the cost of purchasing and installing charging equipment at your primary residence, up to $1,000 per charging port. Bidirectional chargers (the kind that can send power from your car back to your home or the grid) also qualify. For businesses, the base rate is 6% of the cost per unit up to $100,000 per port, rising to 30% for projects that meet prevailing wage and registered apprenticeship requirements.¹¹

Location matters. The equipment must be installed in an eligible census tract, meaning a low-income community or a non-urban area.¹¹ Many suburban and urban addresses don’t qualify at any spending level. The Department of Energy maintains an online eligibility locator you can check before you buy. When you file, use Form 8911 (Alternative Fuel Vehicle Refueling Property Credit) for the tax year the equipment was placed in service.

State Programs and EV Fees

Federal credits are largely gone, but many states still run their own EV incentives, which can include purchase rebates, sales tax exemptions, reduced registration fees, or credits for charging equipment. A growing number of states also charge annual registration surcharges on electric vehicles to make up for lost gas tax revenue, with fees running roughly from $50 to $400 depending on the state. Whether going electric pencils out now depends more on your state than on Washington.

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
Office of the Law Revision Counsel. 26 USC 30C – Alternative Fuel Vehicle Refueling Property Credit
3
Internal Revenue Service. Clean Vehicle Tax Credits
4
Office of the Law Revision Counsel. 26 US Code 30D – Clean Vehicle Credit
5
Internal Revenue Service. Credits for New Clean Vehicles Purchased in 2023 or After
6
Internal Revenue Service. Topic B – Frequently Asked Questions About Income and Price Limitations for the New Clean Vehicle Credit
7
Office of the Law Revision Counsel. 26 USC 25E – Previously-Owned Clean Vehicles
8
Internal Revenue Service. Used Clean Vehicle Credit
9
Internal Revenue Service. Energy Credits Online
10
Internal Revenue Service. Register Your Dealership to Enable Credits for Clean Vehicle Buyers
11
Internal Revenue Service. Alternative Fuel Vehicle Refueling Property Credit