The EV tax credit has become a key factor in the decision to buy a new or used electric vehicle in 2025. Under the recent reforms, the $7,500 credit for new EVs and up to $4,000 for used EVs are set to expire after September 30, 2025.
Understanding the eligibility rules, the deadlines, and how to claim before time runs out is essential for anyone considering an EV purchase.
What Is the EV Tax Credit & What’s Changing in 2025
- The EV tax credit is a federal incentive intended to encourage adoption of electric vehicles by reducing the after-tax cost.
- There are two main versions:
- New EVs: up to $7,500 credit
- Used EVs: up to $4,000 credit (or 30% of sale price, whichever is less)
- Key change: as of September 30, 2025, these credits will no longer be available. So all qualifying contracts / purchase agreements must be made on or before that date.
- Recent updates clarify that the “acquisition” date (binding contract + payment) matters—even if delivery happens after September 30.
Eligibility Requirements & Key Criteria
To qualify for the credit, there are a variety of income limits, vehicle price caps, sourcing rules, and other conditions. Below is a detailed table summarizing requirements:
| Type | Credit Amount | Income Limit (Modified Adjusted Gross Income, MAGI) | Vehicle Price / Condition Requirements | Deadline/“Acquisition” Rule |
|---|---|---|---|---|
| New EVs | Up to $7,500 | Single filer ≤ $150,000; Head of household ≤ $225,000; Married filing jointly ≤ $300,000 | MSRP ≤ $55,000 for cars; ≤ $80,000 for SUVs/pickups/vans; must satisfy assembly & battery sourcing rules | Purchase agreement + deposit by September 30, 2025 |
| Used EVs | Up to $4,000 or 30% of sale price | Married filing jointly ≤ $150,000; Head of household ≤ $112,500; Other filers ≤ $75,000 | Vehicle must be ≥ 2 years old, price ≤ $25,000, battery capacity ≥ 7 kWh; sold by dealer; primarily used in U.S. | Same deadline: contract + payment by September 30, 2025 |
| Leased EVs | Credit goes to leasing company / dealer | Same income/vehicle rules apply for lessee benefit if dealer passes savings on | Lease terms depend; vehicle must still meet qualifying specs | Lease agreement + payment before Sept 30, 2025, after that no new leases qualify under old terms |
| Commercial / Business EVs | Up to $7,500 (or more depending on weight/class) | Business status rather than personal income rules | Must satisfy the clean vehicle sourcing, assembly, and price caps; depending on weight class; IRS qualification as “qualified manufacturer” may apply | Must be acquired by September 30, 2025 |
September 2025 Payment Schedule & Important Dates
With the end date fixed, here’s the timeline you need to follow to ensure you can take full advantage of the credit:
- Before September 30, 2025
- Sign a binding purchase agreement for the EV.
- Pay a down payment or trade-in payment to establish “acquisition.”
- Delivery of vehicle can occur after September 30, provided acquisition (contract + payment) occurred on or before deadline.
- IRS filings / Claims
- Use IRS Form 8936 when filing federal taxes for credit.
- If dealer is eligible / registered, may opt to take the credit at point-of-sale (i.e. discount up front), instead of waiting until tax return.
- Leases
- Under existing rules, leased EVs can still be eligible but the credit is claimed by the lessor. Some dealers pass savings to lessees before the credit expires.
- After September 30, 2025
- New contracts/purchases will not qualify, even if delivery is after.
- The programs for both new and used EVs expire definitively.
Qualifying Vehicle Conditions
To get full credit, the vehicle must meet several technical and sourcing standards. Some vehicles may only qualify for partial credit if they miss one of those conditions (e.g. battery sourcing or critical mineral requirements). Key criteria include:
- Battery component sourcing and critical mineral rules (often requiring parts / raw materials from North America or from certain designated sources)
- Vehicle must be assembled in North America
- MSRP caps: $55,000 for cars; $80,000 for SUVs/pickups/vans for new EVs
- Used EVs need to be ≥ 2 model years old, priced under $25,000, battery ≥7 kWh etc.
If you’re planning to buy an EV, act fast—the $7,500 credit (and $4,000 for used EVs) ends September 30, 2025. Confirm eligibility with your dealer, request a time-of-sale report, and decide whether to take the discount upfront or through your tax return.
For leases, ensure the dealer passes savings on. Locking in a purchase agreement now could save you thousands before the program disappears.
FAQs
Can I still get the tax credit if I take delivery of the EV after September 30, 2025?
Yes, if you signed a binding purchase agreement and made a payment (e.g. down payment or trade-in) on or before September 30. That counts as “acquisition” even if delivery is later.
What happens to the credit for used EVs?
The used EV credit (up to $4,000 or 30% of sale price) also ends on September 30, 2025. To qualify, the vehicle must be at least two years old, cost less than or equal to $25,000, meet battery capacity rules, and be sold by a dealer.
Are there income limits that might disqualify me?
Yes. For new EVs, single filers generally must have MAGI ≤ $150,000, heads of household ≤ $225,000, married filing jointly ≤ $300,000. For used EVs, the thresholds are lower: married filing jointly ≤ $150,000, heads of household ≤ $112,500, others ≤ $75,000.
