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Act soon: The OBBBA Ends Clean Energy Tax Breaks

The newly enacted One, Big, Beautiful Bill Act (OBBBA) represents a major move by President Trump and congressional Republicans to roll back a number of clean energy tax incentives originally introduced or expanded under the Inflation Reduction Act (IRA). Below is a summary of the key individual tax credits that will soon be scaled back or eliminated.

Clean vehicle tax credits

If you’re planning to buy a clean vehicle, consider acting soon to take advantage of expiring tax benefits:

New clean vehicle credit. This credit offers up to $7,500 for qualifying new electric and fuel cell vehicles, depending on how the battery components and critical minerals are sourced. Vehicles that meet only one of the sourcing criteria may be eligible for a reduced $3,750 credit. Originally set to expire in 2032, this credit now ends on September 30, 2025.

The maximum manufacturer’s suggested retail price is $55,000 for cars and $80,000 for SUVs, trucks and vans. To qualify, your adjusted gross income (AGI) must not exceed $150,000 ($300,000 for married couples filing jointly and $225,000 for heads of households).

Used clean vehicle credit. Buyers of eligible used EVs or fuel cell vehicles may claim up to […]

By Linkenheimer LLP|2025-08-13T12:44:20+00:00August 13th, 2025|credit, energy, EV, New Tax Laws, News|0 Comments

Understanding the $7,500 Federal Tax Credit for Buying an Electric Vehicle

Electric vehicles (EVs) have become increasingly popular. According to Kelley Blue Book estimates, the EV share of the vehicle market in the U.S. was 7.6% in 2023, up from 5.9% in 2022. To incentivize the purchase of EVs, there’s a federal tax credit of up to $7,500 for eligible vehicles.

The tax break for EVs and fuel cell vehicles is called the Clean Vehicle Tax Credit. The current version of the credit was created under the Inflation Reduction Act. Here are answers to some frequently asked questions.

Which vehicles qualify for the credit?

To qualify for the full $7,500, there are several requirements. For example:

The vehicle must be a new plug-in electric or fuel cell vehicle.
It must have a battery capacity of at least seven kilowatt hours.
It must meet critical mineral and battery component requirements for vehicles placed in service on or after April 18, 2023. (If the vehicle meets only one of the two requirements, the buyer is eligible for a $3,750 credit.)
The vehicle must undergo final assembly in North America and have a gross vehicle weight rating of less than 14,000 pounds.
It must be purchased for personal use […]

By Linkenheimer LLP|2024-09-11T19:56:23+00:00September 11th, 2024|EV, tax credit|0 Comments