The EV tax credit (ended September 30, 2025)
The federal EV tax credit was eliminated by the OBBBA. Vehicles acquired after September 30, 2025 no longer qualify for the $7,500 new EV credit, the $4,000 used EV credit, or the $40,000 commercial EV credit.
If you purchased an EV before October 1, 2025, you may still claim the credit on your 2025 return.
Business deductions still apply
Even without the EV credit, you can still deduct business use of an electric vehicle:
- Standard mileage rate: 70 cents/mile for 2025, 72.5 cents for 2026 (works for EVs too)
- Actual expenses: Electricity charging costs, insurance, registration, tires, depreciation
The standard mileage rate already accounts for the lower fuel costs of EVs, so track both methods and use whichever gives you the larger deduction.
Heavy EVs (over 6,000 lbs)
Electric SUVs and trucks over 6,000 lbs GVWR are exempt from luxury vehicle depreciation caps:
- Tesla Model X: qualifies
- Rivian R1S: qualifies
- Ford F-150 Lightning: qualifies
- GMC Hummer EV: qualifies
These can qualify for enhanced Section 179 deductions, potentially letting you write off a significant portion in year one.
EV credit: IRC Section 30D, IRS Form 8936. Vehicle deductions: IRS Publication 463. Heavy vehicle rules: Section 179, IRS Publication 946.
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