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

""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. 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."

Electric-vehicle buyers faced a September 30, 2025 deadline for the federal EV tax credit and ambiguity about whether purchase or delivery was required. The IRS clarified that acquisition alone does not immediately entitle a taxpayer to the credit and focused on when the vehicle is placed in service. A written binding contract and a payment made on or before September 30, 2025 allow a taxpayer to claim the credit when taking possession, even if possession occurs after that date. Buyers should receive a time-of-sale report from the dealer at or within three days of taking possession. A downpayment or trade-in counts as payment to qualify.

Read at InsideHook