- The $7,500 EV tax credit will disappear after Sept. 30
- But the IRS says making a down payment and signing a contract that day qualifies, even if you don’t take a car home
Thanks to recent legislation, the federal government’s $7,500 EV tax credit will disappear at midnight on Sept. 30.
President Trump’s signature policy bill, nicknamed the “one big beautiful bill act,” will end the incentive. But the IRS now says buyers don’t have to take possession of a car that day to qualify.
When Congress passes new legislation, federal agencies must write the rules for carrying it out. The IRS is responsible for executing the tax credit and has now published rules on how it will end. The agency is allowing some flexibility.
A new IRS notice explains that a vehicle must be “acquired” before the deadline to qualify for the discount. “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,” the agency says.
Signing Over the Credit as a Down Payment Likely Won’t Qualify
- Buyers can sign over the credit as a down payment, but that alone won’t qualify in time
Buyers can sign the credit over to the dealership as a down payment. However, that alone won’t qualify a car on the 30th.
To claim the $7,500 rebate, taxpayers must take possession of the car. However, paying a down payment or making a trade-in before the deadline entitles them to claim it later when the vehicle is delivered.
“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,” the IRS says.
“The election to transfer the credit generally occurs at the time of sale, which is when the taxpayer takes possession,” the notice says. So buyers will likely need to make some other form of down payment before midnight on the 30th to qualify.
It’s unclear how far in the future taxpayers can take delivery and still claim the credit. Many have already paid a reservation fee on a future vehicle like the upcoming Tesla Roadster or Scout Traveler. However, the agency seems unlikely to allow the credit that far into the future.
