IRS Clarifies Timing of the End of the Federal EV Tax Credit

If you visit the websites of EV manufacturers like Rivian or Tesla right now, you’ll probably notice something right away — a message urging potential buyers in the U.S. to purchase an EV before the federal tax credit goes away. That’s set to take place on September 30, though there’s still been some ambiguity around that deadline: would it apply to EVs purchased by the end of the month, or would they have to be delivered by then?

The IRS has opted to clarify just how the federal EV credit will end, which also illustrates a bit of wiggle room when it comes to the September 30 deadline. In an update on the agency’s website, it explained how the winding down of a number of credits will work — including what needs to be done in order to qualify for the EV credit.

“Acquiring a vehicle prior to the termination date is an initial step, but acquisition alone does not immediately entitle a taxpayer to a credit,” the IRS explained. There’s also the matter of when the vehicle is placed into service,. This is how the IRS explains it: “If a taxpayer acquires a vehicle by having a written binding contract in place and a payment made on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when they place the vehicle in service (namely, when they take possession of the vehicle), even if the vehicle is placed in service after September 30, 2025.”

The agency also added a reminder of some essential paperwork that EV buyers should receive around their purchase. “Taxpayers should receive a time of sale report from the dealer at the time they take possession or within three days of taking possession of the vehicle,” the agency notes.

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In an article for NPR on the IRS’s announcement, Camila Domonoske pointed out another essential element to getting the EV tax credit: buyers will need to make some sort of payment, whether that’s a downpayment on the new vehicle or a trade-in of an older car, truck or SUV. Will the end of the federal tax credits lead to an uptick in EV sales in the U.S. before the month ends? Stay tuned.

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Tobias Carroll

Tobias Carroll lives and writes in New York City, and has been covering a wide variety of subjects — including (but not limited to) books, soccer and drinks — for many years. His writing has been published by the likes of the Los Angeles Times, Pitchfork, Literary Hub, Vulture, Punch, the New York Times and Men’s Journal. At InsideHook, he has…