So, you missed it. Or maybe you're just confused because the news cycle has been a complete wreck lately. If you were planning on a $7,500 government discount for that shiny new Tesla or Rivian, I've got some pretty blunt news for you.
The federal EV tax credit basically died on September 30, 2025.
It wasn't a slow fade. It was a legislative axe. Thanks to the "One Big Beautiful Bill" (OBBB) signed into law on July 4, 2025, the incentives that defined the electric vehicle market for years were abruptly terminated. Most people still think the Inflation Reduction Act rules are in play. They aren't.
The September 30 Cutoff: Why It Matters Now
If you didn't have a signed contract and a down payment in by the end of September last year, the $7,500 for new cars and the $4,000 for used ones are gone. Gone-gone.
Wait. There is a tiny bit of breathing room if you already pulled the trigger.
The IRS has been surprisingly chill about delivery dates. If you signed a binding written contract and made a payment (even a small one) before that September 30 deadline, you can still claim the credit when you file your taxes this April. You just need the car "placed in service"—meaning delivered to your driveway—before you file.
But for anyone walking into a dealership today? You’re paying full price. Or, more likely, you're looking for manufacturer rebates because the federal government is officially out of the subsidy game.
What about charging stations?
Interestingly, not everything vanished at once. The tax credit for installing home EV chargers (Section 30C) actually has a different heartbeat. That one is scheduled to expire on June 30, 2026.
If you’re living in a rural area or a low-income census tract, you can still grab a 30% credit (up to $1,000) for your home charger installation. You’ve got a few months left on that one. Don’t sleep on it like everyone did with the car credits.
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The "New" 2026 Reality: Car Loan Interest Deductions
Since the $7,500 credit is toast, the government swapped it for something... different. It’s called the Car Loan Interest Deduction.
Honestly, it’s not as sexy as a flat $7,500 check. Basically, for loans started after December 31, 2024, you can deduct up to **$10,000 per year** in interest paid on a new, American-made vehicle.
- It has to be for personal use.
- The car must have final assembly in the U.S. (Check your VIN; it should start with 1, 4, or 5).
- There are income caps: $100k for singles, $200k for joint filers.
It’s an "above-the-line" deduction. That means you don’t have to itemize to get it. If you’re paying high interest on a heavy loan for a new Ford F-150 Lightning or a Chevy Blazer EV, this might actually save you a decent chunk of change over a few years. But it’s a slow burn, not an instant discount at the register.
Why the Credits Ended So Early
The Inflation Reduction Act was supposed to run until 2032. We all thought we had a decade.
Then politics happened.
The new administration viewed the subsidies as a "distortion of the free market" and shifted the focus toward American manufacturing rather than consumer handouts. The result was a hard sunset.
Manufacturers like Ford and GM got hit hard. Ford actually took a massive $19.5 billion writedown recently. They’re pivoting back to hybrids because, without that $7,500 sweetener, pure EVs are a much tougher sell for the average person living in, say, Wyoming or Kentucky.
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State Credits: Your Last Best Hope
Just because the federal government stopped the party doesn't mean your state did. This is where the "fractured market" comes in.
If you live in Colorado, you’re still winning. You can stack state incentives that sometimes reach $15,000. California and Vermont are also still aggressively handing out cash. But if you’re in a state that relies on federal guidance? You’re likely out of luck.
Actionable Next Steps for 2026
Since you can't go back in time to September 2025, here is how you play the hand you're dealt:
- Check your VIN immediately. If you bought a car recently and want to use the new interest deduction, verify it was made in the USA. No domestic assembly, no deduction.
- Install your charger before June. If you need a Level 2 setup at home, get it done before the June 30, 2026, deadline to claim that 30% credit.
- Lease, don't buy? Actually, no. The "lease loophole" that let dealers pass on the $7,500 credit regardless of battery origin also died on September 30. Don't let a salesperson tell you otherwise.
- Hunt for "Manufacturer Cash." Since the federal credit is gone, brands like Hyundai and Kia are slashing MSRPs by $7,500 to $10,000 just to keep metal moving. That’s your new "tax credit."
The era of easy government money for EVs is over. We're back to old-school haggling and state-level hunting. If you're filing taxes soon and you did buy before the cutoff, make sure you have your IRS Form 8936 ready and your "time of sale" report from the dealer. Without that paperwork, the IRS will reject the claim faster than a dead battery in a blizzard.