Yes, the federal $7,500 EV tax credit (and $4,000 for used EVs) is gone for vehicles purchased or placed in service after September 30, 2025. The incentives were terminated early due to legislation passed in 2025, ending the previous, long-term incentive structure.
The $7,500 tax credit for new EVs and the $4,000 credit for used EVs will vanish after September 30, 2025 – a full three months earlier than the House originally planned. And it gets more aggressive: leased EVs from non-U.S. automakers lose their credits immediately. The EV charger tax credit also ends in June 2026.
The new tax bill will end the $7500 tax credit on new EVs and the $4000 tax credit on used EVs.
With the passage of the One Big Beautiful Bill in July of 2025, also known as the Working Families Tax Cut, energy tax credits are now set to expire after December 31, 2025.
Premium Increases
As a result, premiums will increase significantly starting on Jan. 1, 2026. What this means is that premium tax credits are still available for 2026, but many people could receive less than they did before.
It has now been replaced by Universal Credit or Pension Credit. If you've received a migration notice letter telling you to claim Universal Credit or Pension Credit, read our guide Universal Credit Migration Notice to learn what to do next.
Key Takeaways. The One Big Beautiful Bill passed in July of 2025 ended the federal EV credit for any vehicles purchased after September 30, 2025. The federal EV tax credit, worth up to $7,500, is a nonrefundable tax credit that has been an effective way to lower the cost of EV ownership for taxpayers.
Under the federal One Big Beautiful Bill Act, the $7,500 federal tax credit for new EVs and a $4,000 credit for used EVs expired on September 30, 2025, leaving buyers without a previously significant incentive to purchase these zero-emission vehicles.
Congress has passed legislation that terminates both the $7,500 tax credit for new EVs and the $4,000 credit for used EVs on September 30, 2025.
Yes, many individual provisions of the Trump-era Tax Cuts and Jobs Act (TCJA) from 2017 are set to expire at the end of 2025, reverting tax law to pre-2017 levels unless Congress acts, with key changes including the standard deduction, SALT deduction cap, and estate tax rules set to change, although legislation like the "One Big Beautiful Bill Act" (OBBBA) has since extended some of these cuts into the future, changing the original expiration cliff.
The federal electric vehicle tax credit (worth up to $7,500 for new EVs and $4,000 for used EVs), is officially ending on September 30, 2025. For more than a decade, these incentives have played a central role in artificially propping up EV sales, coaxing buyers toward electric cars with taxpayer-funded subsidies.
Important 2026 update: the federal EV purchase tax credits for new and used EVs ended for vehicles acquired after September 30, 2025. California, local, and utility incentives (plus the federal charger credit—see below) are now the main savings opportunities.
Yes, in 2024, each parent could gift $18,000 to a child (totaling $36,000 per child for the couple) without tax implications, and for 2025, that amount increased to $19,000 per parent ($38,000 per child) because the annual gift tax exclusion is adjusted for inflation, requiring separate checks for each parent to utilize the full amount, according to TurboTax, Yahoo Finance, Guardian Life, IRS (.gov), and Mercer Advisors.
To avoid the 22% tax bracket (or any higher bracket), focus on reducing your taxable income through strategies like maxing out 401(k)s and HSAs, deferring bonuses, tax-loss harvesting, smart charitable giving, and strategic asset location, understanding that higher rates only apply to income within that bracket, not your entire income.
Update: The New Clean Vehicle Credit is not available for vehicles acquired after Sept. 30, 2025. The vehicle must be placed in service for you to claim the credit.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
Reconfirmation of the commitment to end the sale of new purely ICE cars by 2030, with all new cars and vans being fully zero emission by 2035. A technology definition to permit the sale of hybrid electric vehicles ( HEVs ) and plug-in hybrid vehicles ( PHEVs ) post-2030, alongside zero emission vehicles ( ZEVs ).
After 22 years, the tax credit system is closing and there will be no tax credit awards after 5 April 2025. This is because tax credits have been replaced by universal credit for most people under state pension age.
Tax credit income limits vary significantly by credit (like EITC, Child Tax Credit, AOTC) and depend on filing status and family size, generally using Modified Adjusted Gross Income (MAGI) thresholds, with common examples for 2025 showing phase-outs starting around $200k for Child Tax Credit and specific MAGI caps for AOTC (e.g., $80k single/$160k joint) and EITC ($68.6k single/$61.5k MFJ for 2025). Higher income typically reduces or eliminates credits, while lower incomes may qualify for programs like the EITC or Housing Credits.