John Roe|Car and Driver
- The federal EV tax credit is set to expire after September 30, but a loophole will allow shoppers to still obtain the credit on cars delivered after that date.
- According to the IRS, a customer just needs to have a binding contract in place and at least one payment made before September 30 to obtain the tax credit.
- This means automakers can sell shoppers more EVs with the incentive of the tax credit, as long as the customer signs the paperwork in advance and waits for delivery.
Earlier this year, President Donald Trump signed the One Big Beautiful Bill into law, and in doing so, put an end to the federal EV tax credit that has provided buyers of electric vehicles up to $7500 in savings on a new electric car. While the tax credit isn’t set to officially go away until after September 30, new information from the Internal Revenue Service (IRS) reveals a loophole that will allow some customers who take delivery of a car after that date to still utilize the tax credit.Previously, it seemed that in order to take advantage of the tax credit, delivery of the vehicle would have to happen by September 30. However, the guidance from the IRS reveals that this isn’t necessarily the case. Michael Simari|Car and DriverAccording to the federal agency, “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.”This means that shoppers could theoretically purchase a car and make an initial payment before the cutoff date to claim the tax credit, even if the car isn’t yet available for them to drive home. The IRS states that the customer 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.”It’s unclear just how long after the September 30 cutoff this rule will apply for. Theoretically, someone could receive the tax credit by purchasing a car that isn’t set to be delivered until 2026, as long as the agreement is signed before September 30 and an initial payment is made by that date. Automakers should also be able to leverage this rule to use the tax credit as an incentive to sell as many EVs as possible before the end of September, as long as the customers are willing to wait for delivery. More on Affordable EVs
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Source: caranddriver.com
