by U.S. Tax Service Extends the Deadline for the Electric Vehicle Tax Credit
The U.S. Internal Revenue Service (IRS) has quietly extended the deadline for Americans to receive the clean vehicle tax credit. If customers make a payment and have a binding contract, they will receive the credit. This means that even if they receive the car after the September 30th deadline, they will still get the credit.
Legislative Changes and Impact on Sales
When President Donald Trump signed The One Big Beautiful Bill into law, it accelerated the phase-out of the clean vehicle tax credit. The $7,500 incentive was originally set to end on December 31, 2032, but this date was moved up to September 30, 2025.
This change helped boost electric vehicle sales, as some consumers rushed to buy them before the tax credit expires. However, they got a bit more leeway thanks to new IRS guidance.
Clarification of the Term “Purchase” of a Vehicle
As noted by Investor’s Business Daily, the IRS states that the new and previously used credit “will not be allowed for any vehicle purchased after September 30, 2025.” While this was expected, the meaning of the word “purchased” becomes highly significant.
Although it was initially expected that the car had to be in the customer’s possession, the IRS says that a “vehicle is considered ‘purchased’ on the date a written binding contract is entered into and payment is made.” They also noted that the payment could include anything from a trade-in to a “nominal” amount.
Credit Eligibility Conditions and Next Steps
Unfortunately, it’s not that simple, as the IRS stated that “the purchase itself does not make the credit immediately available,” as it is only the “initial step.” However, they noted: “If a taxpayer purchases a vehicle with a written binding contract and makes a payment by September 30, 2025, inclusive, then they will be eligible to claim the credit when they put the vehicle into service (i.e., when they take possession of it), even if that occurs after September 30, 2025.”
This means that if you sign the paperwork and make a payment by September 30th, you should still receive your tax credit. Surprisingly, the IRS did not mention a deadline for customers to receive the vehicle. While this is confusing, it means customers shouldn’t stress about getting an electric vehicle that might be in short supply as the tax credit phases out.
This change could significantly ease the electric vehicle purchasing process for many Americans, especially given current supply chain issues and shortages of specific models. The extended deadline allows buyers to make deals without excessive pressure, which could contribute to the stability of the electric vehicle market in the coming months. Furthermore, it gives manufacturers additional time to fulfill orders without risking losing customers due to the cancellation of tax incentives.
