EV Tax Credits End in September 2025

Congress began creating tax incentives for purchasing energy efficient vehicles in 2005, and the Inflation Reduction Act passed in 2022 brought major expansion to the electric vehicle (EV) tax credit program. The Trump tax reform bill passed in July 2025 has ended the federal EV credit for any vehicles purchased after September 30, 2025.

For new and used EVs purchased and delivered before September 30, 2025, taxpayers can claim a tax credit of up to $7,500 for a new EV or up to $4,000 for a used vehicle. Here’s a recap of the eligibility rules:

New EV Tax Credit

The credit is available to individuals and their businesses.

To qualify, you must:

• Buy the vehicle for your own use or lease to others, but not for resale.
• Use it primarily in the U.S.

 In addition, your modified adjusted gross income (AGI) may not exceed:

• $300,000 for married couples filing jointly
• $225,000 for heads of households
• $150,000 for all other filers

The credit is nonrefundable when you file your taxes, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years. You can transfer the credit to the dealer at the time of purchase to potentially fully realize the credit.

To qualify, a vehicle must:

• Be propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of at least 7 kilowatt hours.
• Have a gross vehicle weight rating of less than 14,000 pounds.
• Be manufactured by a qualified manufacturer.

• Have final assembly in North America. To qualify for the $7,500 credit, a vehicle must meet final assembly requirements and at least one of the critical minerals and battery component sourcing requirements. Vehicles meeting only one of these requirements may be eligible for a $3,750 credit. Vehicles that don’t meet either requirement are not eligible for the credit.
• The vehicle manufacturer’s suggested retail price (MSRP) can't exceed:
  • $80,000 for vans, sport utility vehicles and pickup trucks
  • $55,000 for other vehicles

The sale qualifies only if:

• You buy the vehicle new. 
• The seller reports required information to you at the time of sale. Seller must also report certain information to the IRS.

Used EV Tax Credit

The used EV tax credit is available to individuals but not to businesses.

For an individual to qualify:

• You must buy it for personal use, not for resale
• You have not already claimed one used EV credit in a 3-year period.
• You are not someone else’s dependent.
• You are not the original owner of the EV

In addition, your modified adjusted gross income (AGI) may not exceed:

• $150,000 for married couples filing jointly
• $112,500 for heads of households
• $75,000 for all other filers

The credit is nonrefundable when you file your taxes, so you can't get back more on the credit than you owe in taxes. The credit goes up to $4,000 or 30% of the used EV’s sales price, whichever is lower.

To qualify, a used vehicle must:

• Meet certain motor and battery qualifications.
• Be at least two years past its model year.
• Have a gross vehicle weight rating of less than 14,000 pounds.
• Sales price cannot exceed $25,000.
• The used EV has not been previously transferred to a new owner or the EV must be on its first transfer since August 16, 2022.
• Be purchased through a qualified dealer.

 The above discussion EV tax credit qualifications has been simplified and does not include all the information you will need to claim the tax credit. If you think you may qualify for the EV tax credit and have questions about how to claim it, give one of our tax professionals a call. We value our clients and are always happy to answer your questions.