Don’t Miss Out: Navigating the Upcoming EV Tax Credit Deadline for Savvy Car Buyers

The federal tax credit for electric vehicle (EV) purchases is about to change. Currently, buyers can receive up to $7,500 off their purchase, but this credit is set to expire on September 30 due to the One Big Beautiful Bill Act. However, there’s a silver lining: the IRS confirmed this week that if you sign a binding contract to buy an EV by that date, you can still qualify, even if the car’s delivery happens later. A small down payment or vehicle trade-in is needed to back that contract.

Traditionally, the IRS determined eligibility based on the delivery date. For instance, if you took delivery of a car that’s eligible for the credit in a later year, you would have missed out. This new guideline aligns with previous IRS practices. Sean Tucker, editor at Kelley Blue Book, notes this approach was used when defining credit eligibility after the Inflation Reduction Act. This flexibility is a win, especially for those ordering cars or buying from out of state, where delivery may take longer.

Andy Phillips from H&R Block’s Tax Institute points out that while it’s hard to predict how many people will benefit from this update, it will help many who are ready to make their purchase before the deadline.

Understanding the EV tax credit can be complicated. For new cars, the credit depends on factors like price limits and battery sourcing. Buyers must also meet income requirements: less than $150,000 for individual filers and $300,000 for couples. Many popular models from Tesla, Chevy, Hyundai, and Kia are eligible, but potential buyers should check with dealerships to confirm qualification. There’s also a $4,000 credit available for used EVs sold for under $25,000.

As EV sales surged from 2020 to 2023, they have since plateaued at around 10% of the U.S. market. Recent reports indicate a slight increase in sales ahead of the tax credit expiration, with new EV sales up nearly 20% year-over-year in July according to Cox Automotive. Still, analysts project sales will drop after the deadline as incentives fade.

Overall, the future remains bright for electric vehicles, with ongoing investments aimed at making them more accessible and affordable. However, the departure of tax credits poses a significant challenge for automotive manufacturers. Jessica Caldwell from Edmunds notes that awareness of the upcoming changes might not be widespread; many consumers could miss out on this crucial opportunity as the deadline nears.

For more insights about the EV tax credit, visit the [IRS guidelines](https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-act-obbb).

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