Federal & State EV Tax Credits Explained

Save Thousands on Your New or Used Electric Vehicle in 2025

Thinking about switching to an electric vehicle? Federal and state EV tax credits can save you up to $7,500 on a new EV or $4,000 on a used one—and in many cases, those savings can be applied at the time of purchase. Here's everything you need to know to take advantage of these incentives.

What Is the Federal EV Tax Credit?

The federal EV tax credit is a nonrefundable credit of up to $7,500 for buyers of qualified new electric vehicles and up to $4,000 for used EVs. The credit can be claimed on your federal tax return or transferred to the dealership at the time of purchase for an instant discount.

To qualify:

• Your income must fall under certain limits (see below)
• Your EV must be on the IRS-approved list
• The vehicle must be assembled in North America
• It must meet strict battery and mineral sourcing standards

💡 New for 2025: You can now transfer the credit directly to your dealer and receive the discount up front—no need to wait for tax season.

Federal EV Tax Credit Qualifications

Price Limits:

• SUVs, trucks, vans: $80,000 or less
• Sedans: $55,000 or less
• Used EVs: $25,000 or less

Income Limits:

• New EVs:
  • Single: $150,000
  • Head of household: $225,000
  • Married filing jointly: $300,000
• Used EVs:
  • Single: $75,000
  • Head of household: $112,500
  • Married filing jointly: $150,000

Pro Tip: You can use your income from either the year the car is delivered or the prior year—whichever qualifies.

Vehicles That Qualify for the 2025 EV Tax Credit

These models are among those eligible for the full $7,500 tax credit in 2025 (subject to final assembly location and battery sourcing):

Tesla Model 3, Model Y, Cybertruck
Ford F-150 Lightning
Chevrolet Blazer EV, Equinox EV
Honda Prologue
Kia EV6, EV9
Cadillac LYRIQ, OPTIQ
Chrysler Pacifica PHEV

⚠️ Always verify model eligibility at fueleconomy.gov and ask your dealership to confirm final assembly and compliance.

State EV Incentives: What You Need to Know

In addition to the federal credit, many states offer additional savings:

• New Jersey: No state sales tax on eligible EVs
• California: Up to $7,500 in rebates plus HOV lane access
• New York: Up to $2,000 through NYSERDA
• Colorado: Up to $5,000 in credits
• Maryland, Oregon, and more: Additional rebates or utility bill credits

Visit your state’s energy department or Plug In America’s incentive map to check local offers.

How to Claim the EV Tax Credit

Option 1: File with Your Taxes

• Use IRS Form 8936 when filing your federal return
• Report the VIN and delivery date
• Only applies to the year the vehicle is delivered

Option 2: Point-of-Sale Discount

• Transfer the credit to an eligible dealer
• Receive an instant discount
• Still requires IRS reporting—but the savings are immediate

Used EV Tax Credit Requirements

• Must be at least 2 years old
• Price must be under $25,000
• Battery capacity of at least 7 kWh
• Credit is 30% of the sale price (up to $4,000)
• Buyer can only claim once every 3 years

How Vantage Auto Group Can Help

At Vantage Auto Group, we help you:

• Identify EVs that qualify for federal and state incentives
• Apply the federal tax credit at point-of-sale
• Understand your eligibility and guide you through documentation
• Stack federal + state rebates to maximize savings
• Explore lease options that pass through the dealer credit

Our team simplifies the EV buying process—so you can go green and save green. 
‍Just get in touch here.

Final Thoughts

The EV tax credit is one of the best ways to save thousands when buying your next car. But with changing rules and eligibility requirements, it pays to have a team on your side. Whether you're buying new or used, Vantage Auto Group can help you get the most out of every incentive.

Ready to Go Electric?

Get a personalized quote and find out which EV tax credits you qualify for.