EV incentives that still exist in 2026 — and what's gone

If you searched the internet for "EV tax credit 2026" and clicked the first three results, you'd come away with three different answers — and at least two of them would be wrong. The legal landscape changed dramatically when the One Big Beautiful Bill Act (OBBBA) was signed on July 4, 2025, and most online content has not caught up.

The short version: both major federal EV tax credits — the $7,500 for new and the $4,000 for used — expired on September 30, 2025. They're gone. Not phased out, not means-tested into oblivion, just expired. In their place, the OBBBA created something different: an annual deduction for car loan interest, available through 2028 — but only for some buyers, on some vehicles, at some income levels.

This article is the version I'd write for a tax client asking what to actually expect. No carryovers from old IRA-era articles, no wishful thinking, no marketing-speak. Just what's left, who can use it, and how to think about timing the one remaining deadline that matters.

For about three years — from the Inflation Reduction Act in August 2022 through September 2025 — the federal EV incentive structure was the most generous it had ever been. New EV buyers under the income caps could claim up to $7,500 at the dealership as a point-of-sale credit. Used EV buyers under separate caps could claim $4,000. Lessees got effectively the same benefit through a leasing loophole. Roughly a million EVs were sold in the U.S. each year during that window, partly because of these credits and partly because of dropping vehicle prices.

Then, on July 4, 2025, the OBBBA was signed into law. Among many other tax provisions, it terminated the IRA's clean vehicle credits — Sections 30D, 25E, and 45W — for vehicles acquired after September 30, 2025. It also moved up the sunset of the home charging credit (Section 30C) to June 30, 2026.

In their place, OBBBA created Section 163(h)(4): a new deduction for interest paid on qualifying car loans. The deduction is genuinely novel — interest on personal car loans hasn't been deductible since 1986 — but it works very differently from the credit it replaced. Below is the side-by-side.

The $7,500 new EV credit and the $4,000 used EV credit both expired for vehicles acquired after September 30, 2025. There's no phase-out, no transition period, no exception. After that date, the credits do not exist for new purchases.

One narrow situation still matters: if you bought a qualifying EV before October 1, 2025 and have not yet claimed the credit on your taxes, you can still do so retroactively on your 2025 or 2026 return. The credit hasn't been clawed back from anyone who legitimately earned it. If you took the point-of-sale version (where the dealer applied the credit at purchase), you still need to file Form 8936 to confirm eligibility, but you don't need to repay unless your income exceeded the threshold for both the year of purchase and the prior year.

For purchases in 2026, both credits are dead letters. Anyone telling you otherwise is reading articles published before the OBBBA was signed.

The OBBBA's headline replacement for the EV credits is a deduction for interest paid on qualifying car loans. Through 2028, eligible buyers can deduct up to $10,000 per year of interest above the line — meaning the deduction reduces adjusted gross income directly, regardless of whether you itemize.

This sounds bigger than it is. A deduction reduces your taxable income; a credit reduces your tax bill dollar-for-dollar. A $7,500 credit was worth $7,500. A $10,000 deduction at the 22% federal bracket is worth $2,200 in actual tax savings. Over a four-year loan, the cumulative benefit might be $5,000–$8,000 in real money — meaningful, but less than the IRA credit it replaced.

The rules are also stricter:

The phase-out math is precise. For every $1,000 of MAGI above the threshold, the deductible amount is reduced by $200. A single filer at $120,000 MAGI is $20,000 over the threshold, so their cap drops by $4,000 — from $10,000 down to $6,000. At $150,000 single (or $250,000 MFJ), the deduction is fully eliminated.

One detail to flag: the deduction is on the interest you actually pay, not on a hypothetical $10,000. If your loan generates $4,000 of interest in a year, you can deduct $4,000 (subject to the phase-out). The $10,000 figure is the upper cap, not a flat benefit. For most loans on most vehicles, annual interest is well below the cap — typically $3,000–$7,000 in early loan years, declining as the principal pays down.

State conformity is its own question. As of early 2026, most state tax codes have not been updated to conform to the new federal deduction. Indiana taxpayers will see federal tax savings but no automatic state savings unless and until the legislature acts. A few states with rolling conformity (New York, Colorado, Montana, North Dakota) automatically pick up the deduction; the rest do not.

The Alternative Fuel Vehicle Refueling Property Credit (Section 30C) survives in 2026 — but with a hard expiration date. The credit terminates for property placed in service after June 30, 2026. If you're considering installing a Level 2 home charger, the calendar matters.

The credit covers 30 percent of equipment and installation costs, up to $1,000 maximum. A typical Level 2 charger plus electrician installation runs $800–$2,500, so most installations will hit or come close to the $1,000 cap. The credit is non-refundable but usable for most middle-income households.

One important wrinkle: the property must be installed in an "eligible census tract" — federally defined as either non-urban or low-income. Most rural and small-town addresses qualify. Many suburbs and most urban centers do not. The IRS publishes a 30C eligibility locator where you can plug in your 11-digit Census Tract GEOID and confirm before installing. For Fort Wayne specifically, much of the city qualifies — but verify your address before assuming.

State EV incentives vary widely. Some states (California, Colorado, New Jersey) maintain robust EV rebate programs independent of federal action. Others (Indiana, most of the South, much of the Midwest) offer little at the state level.

Indiana has no state EV tax credit. There never has been one in any meaningful sense, and the state hasn't moved to create one. Indiana taxpayers' EV-related tax benefits are essentially federal-only.

Utility rebates are different. Indiana utilities collectively offer modest but real benefits, generally focused on Level 2 home chargers and time-of-use rates rather than vehicle purchases:

• AES Indiana: $250 rebate for Level 2 charger purchase through their marketplace; $150 one-time plus $50/year for managed charging enrollment.
• Indiana Michigan Power (AEP): residential off-peak charging rate incentives. No current consumer rebate for home chargers as of early 2026, but worth calling.
• Duke Energy Indiana: previously offered residential charger rebates and off-peak credits; current consumer programs are limited but may reactivate.
• NIPSCO: as of early 2026, no consumer EV or charger rebate programs.
• Local cooperatives: Carroll White REMC offers up to $300 toward Level 2 chargers; Corn Belt Energy up to $200. Smaller co-ops sometimes have the most generous programs.

What to ignore: any blog post claiming Indiana has a state EV tax credit, any article listing the federal credits as still available for new purchases, any tool or calculator not updated since September 2025. The information ecosystem on EV incentives is still catching up.

Shopping for a NEW EV in 2026

The math is genuinely worse than it was in 2024. The $7,500 credit is gone, replaced by a deduction worth $2,000–$2,500 in real money for most middle-income filers — and only if the vehicle is U.S.-assembled and you finance rather than pay cash. Tesla Model Y, Ford Mustang Mach-E, Chevy Equinox EV, and a handful of others qualify. Hyundai, Kia, BMW, Audi, Mercedes, and most Volkswagen EVs do not. Check the Monroney sticker for "Final Assembly Point" before signing. If you can install a Level 2 charger before June 30, 2026, do it.

Shopping for a USED EV in 2026

You get nothing federal. The used credit expired, the loan deduction doesn't apply to used vehicles, and the charger credit is the only thing that might apply. The good news, covered in detail in our used EV article: depreciation has already absorbed the credit's disappearance. A 2022 EV that listed for $32,000 in early 2025 (effectively $28,000 with the $4,000 credit) is now listed for $24,000 — same net cost to you, no credit needed. The market repriced.

Bought before September 30, 2025

You're fine. If you haven't yet claimed the credit on your taxes, it's still legitimately yours. The 2025 tax filing season (early 2026) is the standard window. If you took the point-of-sale credit, the dealer should have given you a Time-of-Sale report; that document is what you need to file Form 8936.

The remaining EV-related tax timeline through 2028 is short and worth keeping in mind:

The deduction itself runs through 2028. After December 31, 2028, it sunsets unless Congress acts — and there's no political momentum to extend it. If you're financing a new vehicle and want to maximize the deduction, completing the purchase well before 2029 makes sense, since interest in early loan years is highest.

The bottom line for 2026 EV buyers is straightforward: the federal EV incentive landscape just got smaller, but the parts that remain are worth using. If you're buying new and can use the loan interest deduction, take it. If you're installing a home charger, do it before June 30. If you're buying used, the savings are in the depreciation curve, not in tax credits — but they're still real.

This article is general information, not personalized tax advice. Consult your CPA or tax preparer about your specific situation. Tax law citations: OBBBA Pub. L. 119-21 (July 4, 2025); IRC §§ 30D, 25E, 30C, 45W, 163(h)(4).