Fed Incentives: Inflation Reduction Act

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Used Electric Vehicle Tax Credit




Current Status

The previously-owned clean vehicle credit (Section 25E), often called the used EV credit, ended for vehicles acquired after September 30, 2025. The One Big Beautiful Bill Act (OBBBA, Public Law 119-21), signed July 4, 2025, set that end date. The same binding-contract rule as the new vehicle credit applies: a vehicle counts as acquired if there was a written binding contract and a payment by September 30, 2025. Nothing replaced it at the federal level.

Program Status Key Date
Used clean vehicle credit (25E) Ended Acquired by Sept 30, 2025
New clean vehicle credit (30D) Ended Acquired by Sept 30, 2025

What the Credit Was

Under the Inflation Reduction Act, Section 25E gave buyers of used electric vehicles a credit of 30% of the purchase price, up to $4,000.

Income Limits

The buyer's modified adjusted gross income (MAGI) could not exceed:

  • Single filers: $75,000
  • Head of household: $112,500
  • Married, filing jointly: $150,000
  • Married, filing separately: $75,000

Other Requirements

  • Purchase price of $25,000 or less.
  • Vehicle model year at least two years old.
  • Only the first resale of a vehicle qualified.
  • A taxpayer could claim the credit once every three years.

Key Dates

  • July 4, 2025: OBBBA signed, ending the credit early.
  • September 30, 2025: Last date a vehicle could be acquired and qualify.

What Still Applies

No federal purchase credit for electric vehicles remains. Some states still offer their own incentives. Examples as of October 2026:

  • Colorado: Vehicle Exchange Colorado has offered point-of-sale rebates of $6,000 for a used EV ($9,000 for a new EV) since November 3, 2025.
  • California: Clean Cars 4 All is available in some regions; availability varies by region.

See State EV Laws & Initiatives for more state programs.

Sources


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