EV and plug-in hybrid buyers could still qualify for a $7,500 tax credit after September 30
The federal clean vehicle tax credit, worth up to $7,500, is set to expire at the end of September 2025. But the IRS just clarified an important detail: Car buyers who lock in a deal before the deadline may still claim the credit, even if their EV or plug-in hybrid arrives later.
The change stems from the “One Big Beautiful Bill,” a wide-sweeping law signed by President Trump
It accelerates the sunset of several clean energy incentives. This includes credits for new and used EVs and plug-in hybrids under sections 25E and 30D, and the commercial credit under 45W.
In the current iteration of the clean vehicle incentive, new EV and plug-in hybrid buyers could qualify for up to $7,500 of the retail price.
Used EV and PHEV buyers could get up to 30% off the sale price, or max $4,000 off. The used sale price, by the way, must be below $25,000. The car needs to come from a licensed dealer, too.
The government explained that the program is shutting down as part of the broader rollback of green subsidies.
Here’s how the federal EV tax credit timing works
A vehicle counts as “acquired” on the date a written binding contract is signed and a payment is made.
That payment can be as small as a nominal down payment or even a trade-in, the IRS says on its FAQ page. Buyers who meet that requirement on or before September 30, 2025, preserve eligibility.
But they cannot actually claim the credit until the car is placed in service, meaning when they take possession. At that point, the dealer must provide a time-of-sale report, either at handoff or within three days.
The IRS also noted that credit transfer elections (the popular option that lets a buyer apply the credit directly at the point of sale) can only be made when the vehicle is delivered, not at contract signing.
The Energy Credits Online portal remains open only to existing users after the cutoff. New registrations end on September 30.
In other words, shoppers still have a path to the $4,000 or $7,500 credit. They just need to have their paperwork and money in order before the deadline. After that, the EV incentive era will be another line item in policy history.
