The IRS has mitigated some of the restrictions pertaining to the electric vehicle (EV) tax credit deadline of September 30, 2025, allowing some wriggle room for purchasers. Under the latest guidelines, the credit will still be available for consumers who enter into a binding agreement and make a payment by the deadline, regardless of vehicle delivery timelines.
Clarifications Made to the Timeline
The IRS has maintained that the qualifying event for the EV tax credit is the date a buyer enters into a binding agreement and makes payment, not the delivery date. This means that consumers are still able to purchase contracts dated prior to the deadline and take delivery after the deadline to be eligible for the credit of $7,500 for new EVs and $4,000 for used EVs. Dealers are advised to provide a “time of sale report” to buyers to ensure credit documentation accuracy.
Expiration of Benefits and Eligibility Requirements
The federal tax incentive, set forth in the Inflation Reduction Act of 2022, was initially set to expire on September 30, 2025. The IRS has confirmed the credit will not be available for claiming on vehicles bought after this date. Vehicle assembly in North America and meeting strict battery and mineral component sourcing requirements is mandatory for the subsidized credits. There are also income and cap limits for purchasers, for example, $300,000 for joint filers for new vehicles and $80,000 for SUVs and trucks, $55,000 for other cars. For used EVs, the vehicle must be older than two years and must not exceed the price of $25,000.
 IRS EV Tax Credit Update — Key Points
| Aspect | Details |
|---|---|
| Deadline | September 30, 2025 |
| Qualifying Event | Binding agreement and payment date (not vehicle delivery date) |
| Credit Amounts | $7,500 for new EVs; $4,000 for used EVs |
| Eligibility Requirements | North American assembly, battery and mineral sourcing rules, income and price caps |
| Post-Deadline Purchases | No credits for vehicles bought after Sept. 30 |
| New Procedures | Tax credits transferable to dealerships starting 2024 |
| Buyer Advice | Act before deadline to retain credit eligibility |
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Deployment and Consumer Procedures
Tax credits are set to become transferrable to the dealership for tax credit redemption starting 2024.This is a practical workaround compared to the inflexibility offered previously. That said, buyers should act before the deadline of September 30 in order to retain eligibility for the credit.
