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Published: August 3, 2025
Modified: August 23, 2025
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, brings sweeping changes to clean energy policy, as well as your finances. If you’ve been considering buying an electric vehicle, now is the time to act. Expiring EV tax breaks mean time is running out to claim thousands of dollars in federal credits for EV purchases, solar panels, and home energy upgrades.
These credits were originally set to last through the early 2030s. Instead, many will vanish by the end of 2025, with some expiring much sooner. Let’s break down the key deadlines and what they mean for your financial planning.
Key Takeaways
- Clean energy tax credits end in 2025, including EV and solar incentives.
- Act now to save up to $16,500 before deadlines hit.
- New car loan interest deduction offers savings through 2028.
Federal Clean Energy Tax Credit Deadlines
EV Tax Credits End September 30, 2025
You have until September 30, 2025 to take advantage of the federal Clean Vehicle Credit. After that, the $7,500 credit for new EVs and the $4,000 credit for qualifying used EVs will disappear, seven years ahead of their scheduled expiration in the 2022 Inflation Reduction Act.
To qualify, EVs must:
- Be purchased and delivered by September 30, 2025.
- Meet North American assembly requirements.
- Be sold under income limits: $150,000 for single filers, $300,000 for joint filers.
Home Energy Credits End December 31, 2025
You have until December 31, 2025 to lock in two powerful residential credits:
- 30% Residential Clean Energy Credit (Section 25D): Covers solar panels, battery storage, geothermal systems, and more. For a $30,000 solar install, that’s a $9,000 savings.
- 30% Energy Efficient Home Improvement Credit (Section 25C): Offers up to $3,200 annually for qualified upgrades like heat pumps, energy-efficient windows/doors, insulation, and energy audits.
Both were set to phase out gradually through 2034, but under the OBBBA, they’re ending this year.
EV Charger Credit Ends June 30, 2026
You still have some time to take advantage of the the Alternative Fuel Refueling Property Credit, which reimburses 30% (up to $1,000) for residential EV charger installations. However, installations must be located in low-income or rural census tracts ↗ as defined in 2023.
New Deduction: Car Loan Interest (2025–2028)
To replace some of the lost incentives, OBBBA introduces a new Car Loan Interest Deduction from 2025–2028. It allows a deduction of up to $10,000 per year in interest for loans on new, U.S.-assembled vehicles (used cars don’t qualify). Key requirements include:
- Final assembly in the U.S.
- Vehicle weight < 14,000 lbs.
- For personal use only.
- Income phase-out starts at $100,000 for single filers, $200,000 for joint filers.
Since this is an above-the-line deduction, you don’t need to itemize to claim it. If you’re in the 24% bracket, $5,000 of qualifying interest could reduce your federal taxes by $1,200.
Financial Planning: What Should You Do Now?
1. Act Fast on EVs
With deliveries required by September 30, 2025 don’t wait until the last minute. Supply chain delays could cause you to miss the window.
2. Begin Solar or Energy Projects Immediately
Solar installations typically take 1–3 months from contract to completion. To qualify for the credit, systems must be installed by December 31, 2025, so now is the time to start.
3. Explore Local Incentives
While federal credits are ending, state and utility-level incentives may still be available. California, New York, and other states offer rebates that can partially offset the loss of federal support.
4. Revisit Your Financing Strategy
With the new car loan deduction in play, consider how it fits into your larger financial plan, especially if you’re buying a vehicle without federal tax credits.
5. Think Long-Term
Even without federal incentives, clean energy purchases may still make sense based on electricity savings, fuel costs, and environmental values. But you’ll need to budget accordingly: solar systems effectively just got $9,000 more expensive, and EVs may now cost $4,000–$7,500 more out of pocket without the tax credits.
Conclusion
The One Big Beautiful Bill Act marks a turning point in federal clean energy policy. Tax credits that once made EVs and home energy improvements more affordable are vanishing far earlier than expected. For anyone considering these purchases, 2025 is basically your last chance to access major federal incentives that could save you over $16,000.
Staying informed is key. Kiplinger ↗ offers a helpful breakdown of how the EV tax credit works in 2025 and why it’s ending so soon. Act quickly to make the most of what incentives are left. Whether your motivation is financial or environmental, the clock is ticking. Make sure your green goals align with your wallet before these doors close for good.
To further reduce your tax liability, explore these proven ways to cut your tax bill.
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