With the signing of the “One Big, Beautiful Bill Act” on July 4, 2025, there are many different changes to the way Americans will pay their taxes and what they can and can not claim as a deduction. One of the main things that has changed, though, is the expiration of the electric vehicle (EV) tax credit on September 30, 2025. Up until that date, EV buyers can get up to $7,500 in tax credits for new electric vehicles and up to $4,000 for used cars. Once the cutoff date is reached, those tax credits will be eliminated.

There is, however, still a way for EV car buyers to qualify for the tax return credit. EV purchasers can lock in their eligibility by entering into a binding contract and making a payment before that date, even if they will not take delivery of the vehicle right away. This is a recent change that may allow you to get the credit you want from your new EV purchase if you are unable to actually get the vehicle before then. Knowing the ins and outs of this rule and what you need to do to qualify will help you save as much money as possible on your new electric vehicle.

What’s Changing and the Key Dates to Know

When the “One Big, Beautiful Bill Act” went into effect on July 4, 2025, the federal EV tax credit was set to be eliminated on September 30, 2025. Soon after, though, the Internal Revenue Service (IRS) issued clarification that as long as the vehicle was purchased with a binding contract before that date and a payment was made, the owner did not have to actually take possession of the vehicle. This means that even if the EVs were not ready to be sold, they could be used as a way to take advantage of the credit.

Not only does this incentivize buyers to make the switch to electric vehicles sooner rather than later, but it also encourages automakers to sell as many electric cars as possible before the cutoff date. It is not clear how long after the date the buyer has to take possession of the vehicle, which leaves it open to many more people and many more dealerships.

Binding Contract Basics in Plain English

​A written binding contract is an agreement between the buyer and seller. The seller can either be a dealership or a manufacturer, and the contract must be enforceable by the law of the state in which it was signed. To meet the requirements for the loophole, the buyer must also make some kind of payment on the contract, which could be a trade-in or a deposit, before September 30, 2025. This does not mean that you must pay the full price for the car in order to qualify for the tax credit. If you meet those requirements, you have technically acquired the vehicle even if you have not physically taken possession of it, which means you can claim the tax credit.

Required Documents, Payments, and Dealer Reporting

In order to get the EV tax credit, you must be sure that you have all the right documentation and that it has been submitted to the correct agencies. First, you must have a written, binding contract stating your intention to purchase the vehicle. This should have the vehicle identification number, your full name and contact information, and the terms of the contract. You will also need documentation that you have made some kind of payment on the vehicle. This can be a trade-in, a down payment, a non-refundable deposit, or a portion of the full sale price. These documents show that you are contractually obligated to buy the vehicle, even if you do not have it in your possession.

The contract and sale must also be reported to the correct agencies in order for you to get the tax credit. The dealer must report the contract using the IRS Energy Credits Online (ECO) portal “time of sale” report. It needs to include your name, taxpayer ID, VIN, the dealer’s attestations, and the fact that the vehicle was eligible for the tax credit. They should also give you a copy of this report for your own records within three calendar days of signing the contract. As long as all the documentation and reporting are done before September 30, 2025, you should be able to get the credit.

Delivery Timing, “Placed In Service,” And Pitfalls

​The “placed in service” stipulation is incredibly important when reporting to the IRS. “Placed in service” means that you took possession of the vehicle within the tax year that you are reporting it. With the new clarifications by the IRS, though, having a binding contract in place is sufficient to get the credit, and the car does not have to be placed in service in order for you to take advantage of it.

There are some pitfalls that you should watch out for when trying to get this tax credit. For example, make sure that your dealer submits all the reports on time. You should also be certain that the vehicle is eligible for a tax credit to begin with, regardless of when you take possession of it. If you are purchasing a used EV, there are also separate rules regarding the vehicle age and the price that your dealer should make you aware of before going through with the contract.

Quick Checklist to Decide Before the Cutoff

​Before deciding that you want to try to get this credit, it is important to have everything sorted out. Going through a checklist before you start the process will help you be prepared and avoid missing out on the benefits.

• Can I Get the Credit? – The federal EV tax credit has stipulations regarding the income of the tax filer. Make sure that you meet the income limit requirements before you purchase your vehicle.
• Is the Contract Binding? – The contract must be enforceable with minimal non-optional conditions. Be sure to discuss the contract with the dealer before moving forward.
• Has the Dealer Registered for Credits? – The dealer must be registered with the ECO portal before it can send in the proper documentation. A dealer that has not registered may not be able to submit your documentation on time or at all.
• Will I Make a Payment? – You must make some kind of payment on the contract before it can be submitted and accepted. Having this payment as a part of your contract will ensure that everything is in order and on time.

How an Endurance Plan Can Help You Save Even More

By using the federal EV tax credit, you can end up saving thousands of dollars on your electric vehicle purchase. If you want to keep saving money as your EV ages and needs repairs, Endurance has you covered. Endurance offers plans that will help protect you from averías mecánicas so you don’t end up spending your federal tax credit on repair bills. Even though EVs don’t have the same mechanical components as all-gas vehicles, they can still develop issues with the brakes, steering, suspension, cooling systems, and a wide range of other parts that can be incredibly expensive to repair. With an Endurance plan in place, you can rest easy knowing that you are saving money no matter what.

Proteja su vehículo con Endurance

Taking advantage of the EV tax credit before time runs out can be a major money saver on your next vehicle purchase, and Endurance is here to help once the purchase is made. Endurance tiene planes for everything from high-mileage cars to exotic luxury vehicles and will even cover cars that other providers won’t. Canadian Gray Market cars, vehicles with a rebuilt or salvage title, and cars used for commercial purposes like rideshare or delivery can all get coverage with an Endurance plan. We also cover hybrid electric vehicles (HEVs) or hybrids (excluding the battery) and offer full coverage for Teslas, including the battery.

On top of high-quality coverage, Endurance plans also come with a large collection of standard benefits. These include Asistencia en carretera 24 horas al día, 7 días a la semana, remolque, cobertura de autos de alquiler y protección contra interrupción de viaje. You can also activate a year of Endurance’s Beneficios de élite for FREE, which come with tire repair or replacement, key fob replacement, windshield coverage, and more.*

If you want to protect your EV after you buy it, contact our plan advisors at (800) 253-8203 para Cotización Gratis. Tú también puedes tienda en linea to see your price right away and make the right choice.

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