The Internal Revenue Service issued a new guidance Thursday clarifying how consumers and businesses can still secure eligibility for federal electric-vehicle tax credits set to expire on September 30.
The end of the tax credit is currently sparking a wave of orders for most EV makers ahead of the deadline.
In a fact sheet updating frequently asked questions on the ‘One, Big, Beautiful Bill Act’ (OBBBA), the IRS said buyers will be treated as having “acquired” a qualifying vehicle if they enter into a binding written contract and make a payment — such as a deposit or trade-in — before September 30.
That means the $7,500 new clean vehicle credit under section 30D, the $4,000 previously owned clean vehicle credit under section 25E, and the $7,500 commercial EV credit under section 45W can still be secured by contract, even if delivery happens after the deadline.
“The credit will not be allowed for any vehicle acquired after September 30, 2025,” the IRS said. “A binding written contract signed on or before September 30, 2025, together with a payment, will establish that acquisition occurred before the termination date.”
Previously, vehicles had to be delivered and placed in service by that date to qualify.
Under the new rules, acquisition secures the credit, while the credit itself can only be claimed once the car is delivered and the dealer provides a time-of-sale report.
The OBBBA, signed into law on July 4, accelerates the phase-out of multiple clean-energy incentives.
Along with the termination of EV credits after September, the Alternative Fuel Vehicle Refueling Property Credit under section 30C will expire June 30, 2026.
Credits for energy-efficient home improvements (section 25C) and residential clean energy (section 25D) will end for expenditures made after December 31, 2025, while the New Energy Efficient Home Credit (section 45L) will terminate for homes acquired after June 30, 2026.
California regulators are weighing whether to step in with state subsidies once the federal credits expire.
Earlier this week, The California Air Resources Board has proposed offering $7,500 credits for new EVs and $4,000 for used EVs, but said funding would depend on available state resources.
In June, Trump said that his plans to cut EV tax credits were “not something new” and that he was surprised that Musk was endorsing him.
To Trump, it is clear that “a lot of people love electric. They love Tesla.” He added that so does he, “in all fairness.”
“I like Tesla, and I like others too, but I also like combustion engines,” the President concluded.
