EV Tax Credits: State-by-State Guide 2025

• admin
• February 17, 2025
• 6 min read

Everything You Need to Know About EV Tax Incentives

A State-by-State Guide to EV Tax Credits and Rebates (2025)

Electric vehicles (EVs) are becoming increasingly affordable due to state and federal incentives. While the federal Clean Vehicle Tax Credit, enhanced by the Inflation Reduction Act, offers up to $7,500 for eligible EV purchases, each state has its own EV tax credits, rebates, and incentives that can further reduce the cost—all administered in compliance with IRS guidelines.

This guide breaks down state-specific EV incentives for 2025, helping you determine how much you can save when purchasing electric vehicles.

Key Takeaways

• Federal tax credits of up to $7,500 are available for new EVs, with certain income and vehicle price limits.
• State-level incentives vary widely, from additional rebates to High Occupancy Vehicle (HOV) lane access and charging station grants.
• Some states offer point-of-sale rebates, reducing upfront costs rather than requiring a tax filing.

Federal EV Tax Credit: What You Need to Know

Before diving into state-specific programs, it’s important to understand the Federal EV tax credit amount, which has been extended through 2032 as part of the Inflation Reduction Act, along with considerations of the MSRP when planning your purchase.

Eligibility Criteria for the Federal EV Credit

1. Income Limits:
   • $300,000 for joint filers
   • $225,000 for heads of household
   • $150,000 for single filers
2. Vehicle Price Caps:
   • $80,000 for SUVs, trucks, and vans
   • $55,000 for all other EVs
3. Transferability:
   • Starting in 2024, buyers can apply the tax credit at the dealership, reducing the purchase price upfront.
4. Used EV Credit:
   • A $4,000 credit is available for used EVs under $25,000.

State-by-State EV Tax Credits and Incentives

While the federal tax credit is available nationwide, individual state incentives vary significantly. Below is a breakdown of state EV tax credits, rebates, and other incentives.

Western States

California

• Rebates: $1,000–$7,500 via the Clean Vehicle Rebate Project (CVRP).
• HOV Lane Access: Single-occupant EVs can use carpool lanes.
• Utility Incentives: Local rebates for home chargers and off-peak charging rates.

Oregon

• State Tax Credit: Up to $2,500 for new EVs, plus an additional $2,500 for low-income buyers.
• Charging Rebates: Up to $5,000 for Level 2 home chargers.

Washington

• Sales Tax Exemption: Up to $15,000 off the vehicle purchase price, especially for cars that meet critical mineral, battery component, and final assembly requirements.
• Utility Rebates: Up to $2,000 for charger installation.

Midwestern States

Illinois

• Rebates: $4,000 rebate for new EVs, $1,500 for used EVs.
• Charging Station Grants: Up to 80% of charger costs covered.

Minnesota

• Tax Credit: $2,500 state tax credit for new EVs.
• Utility Discounts: Special EV charging rates from Xcel Energy.

Michigan

• EV Rebates: $2,000 rebate for new EVs.
• Home Charger Rebates: $500–$1,500 through utilities.

Southern States

Texas

• Rebate: Up to $2,500 through the Texas Emissions Reduction Plan.
• EV Charging Discounts: Special electricity rates for home charging.

Georgia

• HOV Lane Access: EVs get free access to carpool lanes.
• Charging Station Rebates: $250–$500 for Level 2 home chargers.

Florida

• Utility Rebates: $500 for EV home charger installation.
• EV Toll Discounts: Discounts for EV drivers on Florida toll roads.

Northeastern States

New York

• Rebates: Up to $2,000 through the Drive Clean Rebate program.
• Utility Discounts: Con Edison offers time-of-use charging rates.

Massachusetts

• Rebates: $3,500 for new EVs, $1,500 for used EVs.
• Public Charger Incentives: Up to 50% reimbursement for installing public charging stations.

New Jersey

• Sales Tax Exemption: EVs are exempt from state sales tax.
• Rebates: $4,000 for new EVs under $45,000.

How to Claim Your EV Tax Credit and Rebates

To fully capitalize on the financial incentives available for electric vehicle purchases, it’s important to navigate the claiming process effectively. For the Federal Credit, you must file IRS Form 8936 with your tax return. This form is essential for claiming the federal tax credit, which can significantly reduce your tax liability. It’s advisable to consult the IRS website for detailed instructions on completing this form to ensure accuracy and compliance.

When exploring State Incentives, each state offers unique programs that can include tax credits, rebates, and other benefits. To access these, visit your state’s Department of Energy or Department of Motor Vehicles (DMV) website. These platforms provide comprehensive information on eligibility criteria, application processes, and deadlines, helping you to maximize your savings.

Additionally, some states and dealerships provide Dealer Point-of-Sale Rebates, which are applied directly at the time of purchase. This means you can enjoy reduced upfront costs without waiting for a tax refund. It’s beneficial to inquire with your dealership about any available point-of-sale rebates and how they can be combined with other incentives.

By thoroughly researching and understanding these options, you can strategically plan your electric vehicle purchase to take full advantage of both federal and state financial benefits, ensuring a more affordable transition to sustainable transportation.

FAQs

1. Can I claim both the federal EV tax credit and my state’s incentives?

Yes! State incentives can be stacked with federal tax credits, significantly lowering your out-of-pocket costs.

2. Do I need to file taxes to get an EV rebate?

Some states provide point-of-sale rebates, but others require a tax return filing. Check your state’s specific rules.

3. Are EV charging stations eligible for tax credits?

Yes! The federal Alternative Fuel Vehicle Refueling Property Credit covers 30% of installation costs, up to $1,000. Some states offer additional rebates.

Empower Your EV Journey with Maximum Savings

Investing in an electric vehicle is more affordable than ever in 2025, thanks to federal and state incentives. Before purchasing, research what your state offers and check eligibility for point-of-sale discounts.

Want to extend your EV tax filing deadline? Use this guide for tax extension options.