A federal tax break for consumers who buy or lease electric vehicles will disappear after Sept. 30. However, consumers may have a little bit of wiggle room on that time frame, according to a new document released by the Internal Revenue Service.
The tax credits, worth up to $7,500, were scrapped as part of a Republican tax and spending measure passed in July. The law says consumers don’t qualify for a tax break if the EV is “acquired after” Sept. 30.
Some observers initially thought that meant an EV had to be “placed in service” by that date — meaning that consumers had to be in physical possession of the car.
However, the IRS clarified that’s not the case.
If a taxpayer acquires an EV by having a “written binding contract in place” and makes a payment on or before Sept. 30, they’d be entitled to claim the federal tax credit when they eventually take possession of the vehicle — even if that’s after Sept. 30, the IRS said in a set of answers to frequently asked questions issued Aug. 21.
