IRS Clarifies EV Credit Cut-Off Date

The IRS recently issued a fact sheet that clarifies the cut-off date for new, used and commercial clean vehicles (EVs).

The major new federal tax law that was enacted on July 4, 2025 eliminates the credits for such vehicles effective after September 30, 2025. Such vehicles acquired after that date are no longer eligible for any credit.

For taxpayers to be eligible for the credit, they must acquire qualified vehicles on or before September 30, 2025. For this purpose, the IRS has indicated that a vehicle is “acquired” as of the date a written binding contract is entered into and a payment has been made. A payment includes a nominal down payment or a vehicle trade-in.

Taxpayer must place qualified vehicles in service before they can claim the applicable credit, but if a taxpayer acquires a vehicle by having a written binding contact in place and a payment made on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when he or she places the vehicle in service, even if the vehicle is placed in service after September 30, 2025.

The IRS fact sheet does not specify a due date for placing the vehicle in service, as long as the binding contact and payment requirements are met.

Our upcoming seminars in December and January will provide detailed examples and strategies to address the sweeping new federal tax law that was enacted on July 4, along with other recent changes.

Are you registered for one of our upcoming seminars in December and January? If you are not already registered, register here so you’ll be fully prepared!