Lock in the $7,500 Federal EV Tax Credit Before It Expires After September 30, 2025

Are you thinking about buying an electric vehicle (EV)? The federal $7,500 EV tax credit remains the biggest incentive for new EV buyers—but everything changes after September 30, 2025. Here’s your definitive 2025 guide for securing the credit, avoiding common mistakes, and making your EV purchase as affordable as possible.

Overview: What is the Federal EV Tax Credit? 

The Federal Electric Vehicle Tax Credit is a government-backed tax incentive designed to make electric vehicle ownership more affordable for Americans. For many new EVs, the credit is worth up to $7,500 against your income tax bill.

• How it works: The credit applies to new, qualifying electric vehicles bought from licensed dealers.
• Not a rebate: You must claim it on your tax return for the year you purchase the vehicle.
• Non-refundable: The credit reduces your tax liability, but you won’t get cash back for unused portions.

What’s Happening After September 30, 2025 

September 30, 2025 is the current deadline to claim the full $7,500 tax benefit for many popular EVs. After this, eligibility requirements get stricter, and some makes and models will no longer qualify.

• Key deadline: To secure eligibility, you need a binding purchase agreement with a deposit signed by September 30, 2025.
• Delivery flexibility: Thanks to updated IRS rules, you do not have to take delivery by September 30th—just a signed binding contract in place is enough to qualify, even if you receive the car after the deadline.
• Why now: Increased demand and shrinking eligible model lists mean waiting could cost you the credit and your favorite EV.

Step-by-Step: How Do You Secure the $7,500 EV Tax Credit

1. Choose a Qualifying Vehicle
   
   • Check that your desired EV model is still eligible for the credit (manufacturer
     eligibility changes based on sales and assembly location).
   • Confirm the vehicle’s MSRP doesn’t exceed IRS price caps.
2. Meet the Income Requirements
   
   • Make sure your (single/joint) annual income is below the IRS threshold for
     this year.
   • The IRS updates these limits regularly. Consult their website to confirm.
3. Act Before the Deadline
   
   • Contact your dealer and ask for a binding sales agreement with a deposit or down
     payment.
   • Double-check that the paperwork is IRS-compliant.
   • Get written confirmation of the agreement date.
4. File Your Taxes Properly
   
   • Use IRS Form 8936 to claim the credit on your federal tax return for the year
     you signed the agreement.
   • Keep all records in case of audit or verification.

Frequently Asked Questions: EV Tax Credit 2025 

Do I need to take possession before September 30th?
No. As long as you have a signed, binding agreement—including a down payment—on
or before September 30, 2025, you’re eligible, even if delivery happens later.

Does every new EV qualify?
No. The IRS updates the list constantly. Popularity and assembly location can
affect eligibility. Always check the latest guidance before signing.

Is the credit instant (at purchase)?
For most purchases, the credit is claimed on your annual tax return. Some
dealers may apply it at the point of sale. Ask your seller.

What about used EVs?
There is a separate, smaller federal credit for certain used EVs, with
different eligibility rules.

Can I combine this credit with state incentives?

Yes! Many states and utilities offer additional rebates or perks, making EV
ownership even more attractive.

What Happens After September 30, 2025