IRS gives a little more time for electric car buyers to secure the $7,500 tax credit

The IRS has updated the terms of the phase-out of the federal tax credit for electric vehicles to give buyers a little more time to secure the $7,500 tax credit.

Trump’s ‘Big Beautiful Bill’ set a deadline of September 30th to end the $7,500 tax credit for new electric vehicles and the $4,000 credit for used ones.

It looked clear that buyers needed to take delivery before the end of the day on September 30th in order to get the credit, but the IRS has now updated its website to give some leeway to buyers, dealers, and automakers.

The agency wrote in an update on its website:

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 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.

If a buyer has a binding order, not a reservation, and has placed a deposit, they can claim the tax credit once they take delivery, even if it’s after September 30th.

Interestingly, the IRS doesn’t mention a time limit after September 30 to secure the tax credit if you have a deposit on a binding contract.

Electrek’s Take

The last time the tax credit was eliminated, there was at least a planned phase-out period. This time, it looked like it was going to be a clean cut, making it difficult for buyers, dealers, and automakers.

This should make things a little easier.

The end of the tax credit has pulled forward a ton of EV demand into Q3 and it will likely exhaust a lot of automakers’ and dealers’ EV inventory.

They are also all rushing to deliver new orders by September 30th, but now it appears that the tax credit money will still be available for those who lock in their orders by the end of the quarter.

Now, this could also open the door to some shenanigans as automakers could try to convert reservations on upcoming electric vehicles that deliver further down the line, but that would be a risky play.

Any buyers getting into those kind of deals should do it at their own risk.