Act Now: Secure Dual EV Tax Credits Before September 30 Deadline
Act Now: Secure Dual EV Tax Credits Before September 30 Deadline
Prospective electric vehicle (EV) buyers have a critical window of opportunity to maximize their savings by leveraging two distinct federal tax credits. With a key deadline fast approaching, consumers could potentially save thousands on a new EV purchase by combining incentives from both the Biden and Trump administrations.
The Biden-era Inflation Reduction Act offers a tax credit of up to $7,500 for new, plug-in EVs or fuel-cell electric vehicles. However, this significant incentive is set to expire on September 30, 2025. Concurrently, President Trump’s “Big Beautiful Bill” provides an annual tax credit of up to $10,000 on the interest of loans for new vehicles, applicable to purchases made from 2025 through 2028, provided the vehicle weighs less than 14,000 pounds and is assembled in the United States.
For eligible purchasers, stacking these two policies means a potential combined saving of up to $17,500, significantly reducing the cost of a new EV. However, several conditions apply to both credits:
- Inflation Reduction Act (Biden): The vehicle must be assembled in North America, and income limits apply ($150,000 for individuals, $300,000 for joint filers).
- “Big Beautiful Bill” (Trump): The auto loan interest credit phases out for incomes between $100,000 and $150,000 for individuals, and $200,000 to $250,000 for joint filers. It does not apply to fleet purchases, commercial vehicles, or leases.
While new EVs offer the latest technology, the average price this year is around $57,734. Even with the $7,500 credit, the upfront cost remains higher than gas-powered cars, though long-term fuel savings favor EVs. For those considering used vehicles, Biden’s legislation also offers a $4,000 tax credit for used EVs, though this would not qualify for the Trump tax credit. The deadline to utilize the Biden-era new EV credit is rapidly approaching, making early action crucial for those looking to capitalize on these combined savings.
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