Newly Released IRS Rule Making Slightly Loosens Sunset Of The Federal Tax Credit
The IRS, which creates all the fine-print for the incentive, issued an updated set of rules on August 21 about the incentive expiration. It allows buyers to get the incentive if they have a firm contract but have not taken delivery by September 30. This is the relevant language:
“The credit will not be allowed for any vehicle acquired after September 30, 2025.
2. For purposes of the expiring clean vehicle credits under sections 25E, 30D, and 45W, what does “acquired” mean?
For purposes of sections 25E, 30D, and 45W, a vehicle is “acquired” as of the date a written binding contract is entered into and a payment has been made. A payment includes a nominal downpayment or a vehicle trade-in.”
If you enjoy reading IRS documentation, the release is here.
To decode the terms –
- 25E applies to used clean vehicles
- 30D applies to new clean vehicles
- 45W applies to commercial clean vehicle purchases
All of the rules about vehicle eligibility remain in force, including the leasing “loophole.”
In order to actually claim the tax credit, assuming the transfer provision is not used, the date of sale certification from the seller is still required and cannot be issued until the vehicle is delivered to the end customer. The rules do not specify if that has to happen within a certain window from when the contract is signed.
This rule change is looser than the IRA “date placed in service” definition, though there is precedent as a signed contract was allowed to be used in the early months of the incentive during a transition period.
Of course, this only helps at the margins, though any relief is welcome.