The clock is ticking on the federal electric vehicle (EV) tax credit, worth up to $7,500. The One Big Beautiful Bill Act eliminated the credit, set to expire on September 30. However, the IRS has clarified that buyers can still qualify for the credit if they enter a binding contract before the deadline, even if delivery happens later.
According to Sean Tucker, lead editor of Kelley Blue Book, this clarification is consistent with previous language used by the agency and aligns with lawmakers’ intent to treat a binding contract as a purchase. Andy Phillips, vice president of the Tax Institute at H&R Block, notes that this added flexibility will benefit car shoppers who want to buy vehicles in other states or those who prefer to order cars not yet manufactured.
The federal tax credits for EVs are complicated, with various rules and restrictions. Buyers must earn less than $150,000 adjusted gross income ($300,000 for married couples) and purchase qualifying vehicles under a specific price cap. The tax credit can be received upfront in the form of a discount on vehicle purchases for new cars.
As the deadline approaches, analysts predict a near-term surge in EV sales, followed by a drop as buyers scramble to get ahead of the expiration date. Automakers are still investing in new EVs designed to be cheaper, and experts like Jessica Caldwell warn that consumers may be unaware of this change due to the abundance of automotive news.
With the tax credit deadline looming, car buyers can breathe a sigh of relief knowing they have some flexibility in their purchasing decisions. However, it’s essential for shoppers to confirm with dealers that individual cars qualify for the credit and to make payment before the deadline to ensure eligibility.
Source: https://www.npr.org/2025/08/22/nx-s1-5511244/ev-tax-credit-deadline-irs