IRS Clarifies When Federal EV Tax Credit Ends

The Internal Revenue Service has clarified that the Sept. 30 deadline for the federal tax credit for electric vehicles has some flexibility.

If the buyer enters a binding contract to buy an electric vehicle before Sept. 30, the purchase can qualify for the tax credit — even if the car isn’t delivered until later, according to the IRS. But payment before the deadline is also required.

“A payment includes a nominal downpayment or a vehicle trade-in,” according to the IRS. The tax credit will not apply until the buyer takes possession of the electric vehicle even if the actual transfer happens afterward.