Important Update: EV Tax Credit Ending Soon—Here’s What You Need to Know
At KerberRose, we want to make sure you're aware of a major change that could impact your financial planning. The recently passed “Big Beautiful Tax Bill” includes a surprise provision: the federal Electric Vehicle (EV) tax credit will be eliminated after September 30, 2025.
What’s Changing?
The EV tax credit—previously available for new, used, and commercial electric vehicles will no longer be offered starting October 1, 2025.
There’s no phaseout or replacement; after the deadline, the credit disappears entirely. However, according to recent IRS guidance, you may still qualify if you enter a written binding contract to purchase an eligible vehicle and make a payment before September 30, 2025, even if your vehicle is delivered later.
To be eligible, your vehicle must meet current rulings:
Final assembly in North America
Stringent battery sourcing rules
Must fall under federal price caps: $55,000 for most cars and $80,000 for SUVs/trucks
Income limits apply: $150,000 for single filers, $225,000 for heads of household, and $300,000 for married couples filing jointly
How the Credit Works
This is a non-refundable tax credit, meaning:
It reduces your federal tax bill, but you won’t get a refund if your tax liability is lower than the credit amount.
You can only use it once per taxpayer.
For example, if you owe $5,000 in federal taxes and qualify for a $7,500 credit, you’ll only benefit up to $5,000—the rest is lost.
That’s why timing and tax planning are key.
What You Should Do
If you’re considering an EV purchase, here are two smart steps:
Buy Before September 30, 2025: Make sure your purchase is finalized—including delivery and paperwork—before the deadline.
Plan for Your 2025 Tax Liability: Work with your Trusted Advisor here at KerberRose to estimate your 2025 taxes. If your liability is too low to use the full credit, we may consider strategies like:
Taking IRA Distributions
Doing Roth conversions
Taking short-term capital gains
See if the ability to pull income into 2025
Defer deductions (stack in 2026)
Why Is the Credit Ending?
Lawmakers believe the EV market is strong enough to stand on its own. The repeal helps fund other tax relief measures, such as a higher SALT cap and increased estate tax exemption.
If an EV is part of your financial or lifestyle goals, now is the time to act. Contact your KerberRose advisor to discuss how this change fits into your broader financial plan and ensure you don’t miss out on this opportunity.
Tony Powers, AIF®, CFP®, CRPS® Shareholder
Tony Powers, President of KerberRose Wealth Management, has more than 20 years of experience in the financial services industry. He specializes in helping private and public sector employers set-up and manage their employee retirement plans. Tony provides Fiduciary Services and Support, Plan Design Consultation, Plan Benchmarking and Financial Wellness.