Breaking Down Key Changes in the 2025 Tax Act: The EV Credit

The 2025 Tax Reform Act, sometimes called the “One Big Beautiful Bill,” introduced many changes that affect individuals and businesses. One of the most time-sensitive opportunities is the federal electric vehicle (EV) tax credit.

If you are considering buying an EV, now may be the best time to act. The current credit of up to $7,500 for qualifying vehicles is set to expire on September 30, 2025.

In our latest video, Brett Karhoff, CPA and Tax Shareholder at Hungerford CPAs + Advisors, explains the rules, requirements, and benefits of the EV tax credit — including how buyers can use it for instant savings at the dealership.

Who Qualifies for the EV Tax Credit?

Not every vehicle or buyer is eligible for the credit. Here are the key requirements under the 2025 Tax Act:

• Price Cap (MSRP):
  • SUVs, trucks, and vans must be under $80,000.
  • Sedans and other vehicles must be under $55,000.
• Final Assembly Location: The vehicle must be assembled in the U.S., Canada, or Mexico.
• Income Limits:
  • Joint filers: $300,000 or less modified adjusted gross income (MAGI).
  • All other filers: $150,000 or less MAGI.
• Battery and Mineral Requirements: The EV must meet critical mineral and battery component sourcing rules to qualify for the full $7,500 credit.

New vs. Used EVs

The credit isn’t limited to new vehicles. Buyers who purchase a used EV directly from a dealer may qualify for a credit of up to $4,000. This makes EV ownership more accessible for a wider range of consumers.

A Key Benefit: Instant Savings

Perhaps the most exciting change under the 2025 Tax Reform Act is that buyers don’t have to wait until tax season to benefit. You can elect to transfer the credit directly to your dealer, effectively applying it as an immediate discount on your vehicle purchase.

This helps reduce the upfront cost of an EV — something that can make a significant difference when budgeting for a new car.

Act Before the Deadline

Remember, to qualify, your EV must be purchased and delivered by September 30, 2025. After that, the federal EV credit will no longer be available unless new legislation is passed.

With demand for EVs growing and eligibility rules detailed, it’s essential to confirm with your dealer — and your CPA — before you buy.

Plan Ahead with Hungerford

At Hungerford CPAs + Advisors, we help individuals and businesses stay ahead of tax law changes. If you are considering an EV purchase, our team can review your eligibility, help you plan around income limits, and ensure you maximize the benefit before it expires. Reach out to Hungerford today to discuss how the 2025 EV credit fits into your tax and financial strategy.