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EV Tax Credits Ending Sept 30: Save $7,500 Before It’s Gone

Author: Elite Consulting, P.C. | | Categories: clean energy policy , Economic policy , EV tax credit 2025 , federal tax credits , Trump Accounts , TrumpTaxPlan

Blog by Elite Consulting, P.C.

Are you thinking about buying an electric car? If so, you’ll want to act quickly. The federal EV tax credits that give buyers up to $7,500 for new vehicles and $4,000 for used vehicles are set to expire on September 30, 2025.

This big change is part of the new One Big Beautiful Bill Act. But there’s some good news, too. Starting in 2026, buyers may qualify for a new tax deduction of up to $10,000 on interest for loans when they buy U.S.-assembled cars.

So what does this all mean for shoppers today? Let’s break it down in simple terms.


What Is the EV Tax Credit?

The EV tax credit is a federal program that helps people save money when they buy an electric vehicle (EV).

  • If you buy a new EV, you can get up to $7,500 off your federal taxes.
  • If you buy a used EV, you can get up to $4,000.

This credit has helped make EVs more affordable and has encouraged more people to switch from gas cars to cleaner electric ones.


Why Is the EV Tax Credit Ending?

The government set an expiration date for these credits because they were meant to be a temporary boost. Policymakers wanted to help grow the EV market and give people a reason to buy early.

Now that EV sales have grown, the credit is scheduled to end on September 30, 2025.


What Comes After the Expiration?

While the current credit is ending, a new incentive is coming. Starting in 2026, income-qualified buyers will be able to claim a deduction of up to $10,000 in loan interest when buying a U.S.-assembled car.

This means:

  • If you take out a loan to buy an EV made in America, the interest you pay on that loan could reduce your taxable income.
  • This will help make payments more affordable over time.


Why Should Buyers Act Now?

If you’ve been thinking about switching to an EV, now is the time. Here’s why:

  1. Big Savings Are Ending – The $7,500 credit is larger than the future $10,000 interest deduction in most cases.
  2. More Choices Now – Many dealerships still have EVs that qualify.
  3. Avoid Price Increases – As the deadline gets closer, demand may rise, pushing up prices.


How to Qualify for the EV Tax Credit

Not every EV or dealership qualifies for the tax credit. To make sure you can claim it, follow these steps:

  1. Buy From an IRS-Registered Dealer
    • The dealership must be approved by the IRS to process the credit.
  2. Check Vehicle Eligibility
    • Use tools like Plug In America or Recurrent to confirm which cars qualify.
  3. Income Limits
    • To claim the credit, your income must fall under certain limits:
      • $150,000 for individuals
      • $300,000 for married couples filing jointly
  4. Price Caps
    • New cars must cost under $55,000 (for sedans) or under $80,000 (for SUVs and trucks).
    • Used cars must cost under $25,000.


Tips for Shopping Smart

If you’re ready to buy, here are some quick tips to make the most of the credit:

  • Shop Early – Don’t wait until the last week of September. Cars may sell out.
  • Ask About Instant Rebates – Some dealers can apply the credit at the time of sale, lowering your upfront cost.
  • Compare Total Costs – Remember to factor in fuel savings, maintenance, and charging costs when comparing EVs to gas cars.


The Bigger Picture

The end of the tax credit is about more than just buying cars. It shows how the U.S. is trying to balance clean energy goals with economic policy.

  • On one hand, the government is reducing direct tax credits.
  • On the other, it’s introducing a new loan interest deduction to support U.S.-based manufacturing.

This shift could push more people to buy American-made vehicles and support domestic jobs.


Who Wins and Who Loses?

  • Winners:
    • Buyers who act before September 30, 2025, and get the full credit.
    • U.S. automakers, who may see stronger sales from the new deduction.
  • Losers:
    • Shoppers who wait too long and miss the current credits.
    • Foreign EV makers, who may lose U.S. sales after the change.


What This Means for Small Businesses

It’s not just families who are affected. Small businesses that use EVs for deliveries, services, or company cars can also lose out if they wait. By buying before the deadline, they can lower their tax bill and cut fuel costs.



FAQs

Q: Can I still claim the credit if I order the car before September 30, 2025?
A: The vehicle must be delivered and placed in service before the deadline.

Q: Will state incentives still apply?
A: Yes. Some states, like California and New York, offer their own EV rebates. These are separate from the federal program.

Q: Is leasing an option?
A: Yes. Some leases allow the dealer to claim the credit and pass the savings to you.


The clock is ticking on the federal EV tax credits. If you want up to $7,500 off a new EV or $4,000 off a used one, you must buy before September 30, 2025.

After that, a new loan interest deduction will kick in, but for most buyers, the current credit offers the bigger savings.

So if you’ve been thinking about going electric, now may be the best time to make the switch. Act fast, shop smart, and take advantage before the window closes.

 

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