Maximize Your EV Tax Credit: Act Before September 30, 2025

Critical Tax Credit Deadline: If you're considering purchasing an electric vehicle (whether for personal use or as part of a business fleet), it’s time to act swiftly. The federal tax credits provided under the One Big Beautiful Bill Act (OBBBA) are set to expire on September 30, 2025. Here’s what this means for potential savings and how you can still leverage these credits efficiently.

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Impending Expiration: Why It Matters and What To Do

Originally intended to last until 2032, the OBBBA-backed tax credits for electric vehicles will now sunset much earlier—leaving no room for phased reductions, grace periods, or grandfathering for future deliveries.

  • New EV Credit: Up to $7,500
  • Used EV Credit: Up to $4,000
  • Commercial EV Credit: From $7,500 to $40,000, based on vehicle weight

Understanding Purchase Timing and Lease Dynamics

To qualify, make sure the vehicle is in your possession by September 30, 2025. Note: simply having a contract or scheduled delivery after this date is insufficient.

EV Leasing and Tax Credit Allocations:
For leased EVs, the tax credit is typically claimed by the manufacturer or dealer, who usually reflects this in reduced monthly payments or the overall lease price. This “leasing loophole” allowed full $7,500 credits under certain conditions until its expiration on September 30. Post-deadline, this will cease for new leases or deliveries.

Immediate Actions for Dealers and Consumers

  • Act promptly: Confirm inventory availability and secure your vehicle ahead of the deadline.
  • Understand credit application: Determine if you’ll apply the credit at purchase or claim later via IRS Form 8936.
  • Review eligibility criteria:
    • For new EVs: Check compliance with sourcing, assembly standards, and observe price and income limits ($55K - $80K, income caps for singles, heads of households, and married couples).
    • For used EVs: Vehicles must be at least two years old, purchased through dealers, with a cap price of $25K; credit maxes out at $4K or 30% of sale price.
    • For commercial EVs: Determine business applicability and weight-based criteria, with no income restrictions.

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Market Impacts and Strategic Considerations

Analysts forecast a potential surge in EV transactions leading up to the cutoff, followed by a possible market contraction. A Harvard study projects a 6% drop in EV market share by 2030, with the new legislation saving the government a substantial $169 billion over ten years. (Reuters)

While time is of the essence, those who act now can secure significant savings.

At a Glance Summary

Credit Type Amount Eligibility Deadline
New EV (individual) Up to $7,500 Meets sourcing, assembly, price, income rules Take possession by Sep 30, 2025
Used EV Up to $4,000 (or 30%) Vehicle ≥2 years old, ≤ $25K Same as above
Commercial EV Up to $40,000 Business use, weight-based criteria Same as above
Leasing loophole Up to $7,500 Ends after Sep 30 Included above

Final Advice: Act Swiftly

If an electric vehicle fits your financial or business strategy, expedite your plans now to lock in credits before they vanish. Consult with a tax professional, like those at MJ Ahmed CPA PLLC, to verify compliance and maximize your financial benefits. The clock is ticking on these lucrative incentives.

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