2025 EV Tax Credit Guide

What is the §30D Clean Vehicle Credit?

The §30D Clean Vehicle Credit is a federal tax credit of up to $7,500 for purchasing a new electric vehicle. It was significantly expanded and modified by the Inflation Reduction Act of 2022 and updated further for 2024 and 2025. The credit is non-refundable, meaning it can reduce your federal tax liability to zero but cannot generate a refund.

Eligibility requirements for 2025

Income limits: Your modified adjusted gross income (MAGI) must be below $150,000 for single filers, $225,000 for heads of household, and $300,000 for married filing jointly. You can use either the current year or prior year MAGI — whichever is lower.

MSRP caps: The vehicle's manufacturer suggested retail price must be $55,000 or less for sedans, wagons, and hatchbacks, or $80,000 or less for trucks, SUVs, and vans.

Assembly requirement: The vehicle must be assembled in North America. This requirement has disqualified many foreign-assembled EVs from the credit.

Battery component and mineral requirements: A portion of the battery components must be manufactured or assembled in North America, and a portion of critical minerals must be extracted or processed in the US or a country with a free trade agreement. These requirements phase in over time and determine whether you get $3,750 or the full $7,500.

How to claim the credit

File IRS Form 8936 with your federal tax return. Alternatively, since 2024, you can transfer the credit to the dealer at the point of sale for an immediate price reduction — you do not have to wait for your tax return.