$7500 Tax Credit For Mass. Residents Ends Sept. 30, 2025

The federal electric vehicle (EV) tax credit, an incentive for promoting clean energy adoption, is set to expire on September 30, 2025, under the One Big Beautiful Bill Act, signed into law on July 4, 2025.

This tax credit is still good on purchases of new EVs and PHEVs (plug in hybrid vehicles). Used EV's have an applicable tax credit of $4000.

$7500 Tax Credit For Mass. Residents Ends Sept. 30, 2025

The changes are due to a budget reconciliation bill, also known as the One Big Beautiful Bill Act. The new and used EV tax credits were set to expire by the end of 2032, but the bill shortened the timeline. -consumerreports.org

This legislation accelerates the termination of the $7,500 credit for new EVs and $4,000 for used EVs, originally extended through 2032 by the Inflation Reduction Act. The credits, applicable to qualifying plug-in electric and fuel cell vehicles, aim to reduce upfront costs for buyers, but eligibility requires vehicles to meet specific manufacturing and price criteria, such as North American assembly and MSRP caps of $80,000 for SUVs and $55,000 for sedans.

The early phase-out, effective after September 30, 2025, is expected to trigger a surge in EV purchases as consumers rush to secure savings before the deadline. A Harvard study projects a 6% reduction in EV market penetration by 2030 due to the credit’s end, potentially saving the government $169 billion over a decade.

Buyers must act quickly, allowing for vehicles are purchased and delivered by September 30, 2025, to claim the credit, either as a tax reduction or point-of-sale discount through registered dealers. State-level incentives may persist, but the loss of federal support could increase costs and slow EV adoption.