Clean Vehicle Tax Credit Termination: What You Need to Know

If you’ve been considering the purchase of an electric vehicle (EV) for yourself or your business, the clock is now ticking faster than you think. Recent legislation in Washington has accelerated the expiration of key tax credits that have helped make EV adoption more affordable.

What’s Changing?

As part of President Trump’s “One Big Beautiful Bill Act,” three major electric vehicle tax incentives will expire—effective September 30, 2025:

• Section 45W: Commercial Clean Vehicles Credit
  Provides up to $7,500 for light-duty EVs and up to $40,000 for heavy-duty commercial vehicles.
• Section 30D: New Clean Vehicle Credit
  Offers up to $7,500 for qualifying new EVs, with eligibility tied to domestic sourcing of battery materials and components.
• Section 25E: Previously Owned Clean Vehicle Credit
  Delivers up to $4,000 (or 30% of the purchase price) for eligible used EVs.

The IRS has clarified that the key deadline isn’t just about taking delivery by September 30—it’s about entering into a written, binding purchase contract with even a nominal down payment by that date. That means taxpayers can still qualify for the credit even if the vehicle isn’t delivered until after September 30.

Planning Ahead

Whether you’re considering EVs to modernize your fleet, lower your operating costs or reduce your personal carbon footprint, the financial benefits of the current credits can be significant. Losing access to thousands of dollars in incentives could alter the cost-benefit equation.

At Illumination Wealth, we help clients evaluate opportunities like this in the broader context of their financial and tax planning. If EV adoption is on your horizon, now is the time to explore how it fits into your long-term strategy—and how you can maximize the available tax benefits before they potentially disappear. Contact us today for help with all your financial planning needs.