Following the expiration of federal EV tax credits on September 30, 2025, in the U.S., they are being replaced by a mix of manufacturer-driven price cuts, potential state-level incentives like California's proposed $200 million "on-the-hood" rebate program, and increased focus on local utility provider rebates.
On Friday, Jan. 9, Newsom unveiled a $200 million plan to offer a new “on‑the‑hood” rebate—an instant discount at the dealership aimed at softening the blow for California drivers and preserving the state's status as the country's EV stronghold.
Congress passed legislation that will end federal EV tax credits as of September 30, 2025.
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.
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.
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 ).
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.
As EVs get older, the batteries progressively degrade. It is expected that at around 75% of the battery's original capacity, it has reached the end of its life in an EV. In reality what this means is that if the car was sold with 400 km driving range, at the end of its useful life it could be down to around 300 km.
President Donald Trump's so-called big beautiful bill ends federal EV tax credits after Sept. 30. Consumers may rush to buy or lease an electric vehicle before that deadline to get a tax break. Tesla said now is the time to "YOLO" purchase an EV, referencing the fast-approaching deadline.
It has now been replaced by Universal Credit or Pension Credit.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.
Yes, EVs tend to depreciate more quickly than ICE vehicles, but this gap is closing, and is set to match their depreciation level over time. There are several factors which contribute to this depreciation which will be outlined throughout this guide.
One Big Beautiful Bill Tax Law Changes for your 2026 (and on) tax returns
Without enhanced PTCs, we project that 4.8 million more people will be uninsured in 2026 relative to a policy that extends enhanced PTCs, an increase in the uninsured population of 21 percent. Non-Hispanic Black people, non-Hispanic White people, and young adults would see the largest increases in uninsurance.
Yes, the Medicare Part D "donut hole" (coverage gap) is officially eliminated as of January 1, 2025, thanks to the Inflation Reduction Act, simplifying coverage into three phases: deductible, initial coverage, and catastrophic, with a new $2,000 out-of-pocket spending cap that eliminates the gap where higher costs used to occur.
Among the most promising options for replacing electric cars are hydrogen-based and biofuel-based propulsion systems. Both approaches have unique features and significant benefits that could transform the future of mobility, but they also have drawbacks.
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.
The Electric Vehicle Credit expires on September 30, 2025, meaning purchases made before this date may still qualify for up to $7,500 for new EVs, $4,000 for used EVs, and $40,000 for commercial EVs.
The standard deduction increased for 2025 and 2026, and a new temporary “bonus” deduction for adults 65 and older begins in 2025. The child tax credit increased to $2,200 for the 2025 and 2026 tax years; retirement plan contribution limits for IRAs and 401(k)s also increased for 2026.