If you are in the market for electric vehicles then this year will bring about maximum savings to you. The US EV Tax Credit Rules Change 2025 shall be related towards getting a tax credit of $7500 if you have purchased a new vehicle. If you have purchased a used electric vehicle, you could be given the tax credit for $4000. The individuals could also transfer the credit to the dealer in order to get a discount and you shall check all the changes which are to be applicable and shall also check the Federal Tax Credit Eligibility 2025 to know if you could qualify for these changes or not. If you wish to buy an electric vehicle, this article is surely for you.
US EV Tax Credit Rules Change 2025
Before you begin with the changes towards the EV Tax Credit, the first step is to know what actually is the tax credit for the Electric Vehicles. The EV Tax Credit is stated to be the non refundable tax credit which shall be given to the individuals who shall be purchasing the electric vehicles or will plug in towards the hybrid vehicles. The tax credit if it is a non refundable one shall lower the ability for the tax liability and the ones purchasing the electric cars are now eligible to get the benefit. There are only certain cards which shall be eligible towards the tax credit while it is stated that you need to check the website FuelEconomy.gov to know about the cars which shall be eligible and can help you to get the tax credit.
In 2024 it was said that discounts could be given to you if you transfer the credit to the dealer and not claim it at the time of tax return. This could help the dealers to reduce the price of EV’s and will provide an immediate discount as well. The year 2025 has now come with more changes and the biggest change has been towards the purchase of new electric cars where you could be given the tax credit of $7500 while purchasing a used one will provide you a tax credit of $4000. Previously the individuals could claim the tax credit on the new or used cars only while they have been making tax returns but now you can claim it at the time of making a purchase in the form of discounts. There have been just 19 EV models which shall qualify towards this tax credit which were 43 in the year 2023.
Changes In EV Tax Credit 2025
- The list of the vehicles which would qualify for the tax credit has changed with the year 2025 and the amount of $7500 is tied with the source of battery components.
- The number of EV’s to be qualified in 2025 has been hiked from 24 to 27 this year but the automaker products have been reduced from the list in the process.
- The amount of tax credit for the new cards has been $7500 and is split in 2 components which have been $3750 for the case if the battery component is made in the USA.
- The other half states that 60% of the critical minerals in the battery are to be extracted or refunded in the USA.
- The amount of tax credit for the used cars has been $4000 and you can transfer the credit to the seller to get the point on sale discounts.
What Is Federal Tax Credit Eligibility 2025?
The following conditions are to be met by an EV to qualify for the federal tax credit in the year 2025.
- The battery capacity can’t be above 7 kilowatt hours
- The GVWR shall be less than $14000 pounds
- EV shall be made through a manufacturer who is qualified
- The final assembly shall be done in North America only
- All the battery and mineral components shall be met
- If the EV is van or any truck, the MSRP can’t be more than $80000
- For the remaining EV, the MSRP shall be up to $55000
EV Tax Credit Income Limits 2025
Along the price caps on the cars, EV tax credit will also see a modified adjusted gross income which the taxpayers will qualify for.
| New EV | Used EV |
| Single and married filing taxes separately $150000 | Single and married filing taxes separately$75000 |
| Head of household : $225000 | Head of household : $112500 |
| Married filing jointly : $300000 | Married filing jointly : $150000 |
How To Claim Tax Credit?
To get the tax credit, Form 8936 has to be filled along with tax returns. The dealer shall give the copy of the time of sale report and if you haven’t got the copy, you shall follow the complete guide then.
FAQs On US EV Tax Credit Rules Change 2025
What is the US EV Tax Credit?
It is the tax credit which you shall be given on the Electric Vehicle purchase.
What is the US EV Tax Credit Rules Change 2025?
$75000 tax credit shall be given to the individuals buying new cars while $4000 shall be given on the purchase of old cars.
What is the other change in EV Tax Rules 2025?
The other change is that you can transfer the credit to the dealer to get a discount at the time of purchase.