Double Dip Delight Stack Trump & Biden Tax Credits to Drive Away with EV Savings!

Maximize Your Savings: How to Stack Trump's and Biden's Tax Credits on Electric Vehicles

Are you in the market for a new electric vehicle (EV)? If so, you might be able to significantly reduce your purchase price by strategically combining tax credits from both the Biden and Trump administrations. This window of opportunity is closing soon, so understanding how to leverage these incentives is crucial. Let's break down how you can potentially save thousands.

The clock is ticking! You have less than three months to take full advantage of this unique situation.

Understanding the Tax Credits

Here's a look at the key legislation from each administration and how they impact EV purchases:

• Biden's Inflation Reduction Act (IRA): This act offers a tax credit of up to $7,500 for new, plug-in EVs or fuel-cell electric vehicles.
• Trump's "Big Beautiful Bill": This legislation provides an annual tax credit of up to $10,000 on the interest of loans for new vehicles, provided they weigh less than 14,000 pounds and are assembled in the United States. This credit is available for purchases made from 2025 through 2028.

Important Note: The Biden-era $7,500 tax credit, as it currently stands, will end on September 30th.

How to Stack the Auto Tax Credits

The strategy involves claiming the $7,500 EV tax credit from the Inflation Reduction Act this year (before it potentially changes) and then utilizing the "Big Beautiful Bill" credit on your auto loan interest over the following years. This combination could result in substantial savings over the lifespan of your vehicle loan.

Example: By strategically timing your purchase and loan, you could potentially reduce the overall cost of your new EV by leveraging both credits.

Is a New EV the Right Choice for You?

While combining these tax credits can lead to significant savings, it’s essential to consider the overall investment. According to Kelley Blue Book, the average price paid for a new EV this year is around $57,734. Even with the $7,500 tax credit, the upfront cost can still be higher than a comparable gas-powered car. However, when you factor in the five-year fuel costs – $9,490 for gas-powered versus $4,295 for electric – the long-term savings can be considerable.

Consider Used EVs: If you’re looking for a more budget-friendly option, the average listing price for used EVs this year is approximately $20,000 less than new models. You can also get a $4,000 tax credit from Biden's legislation for a used EV, but remember, that wouldn’t qualify you for the Trump tax credit on loan interest.

Important Fine Print to Consider

Before making any decisions, be aware of the eligibility requirements for each tax credit:

• Big Beautiful Bill: This tax credit phases out for individuals with incomes between $100,000 and $150,000, and for those filing jointly with incomes between $200,000 and $250,000. It's not available for fleet purchases, commercial vehicles, or leasing.


• Inflation Reduction Act: To qualify for the EV credit, the car must be assembled in North America and purchased for personal use. Your income must be below $150,000 for individuals and $300,000 for those filing jointly.

Final Thoughts

Navigating the world of tax credits and EV incentives can be complex, but with careful planning and understanding of the eligibility requirements, you can potentially save thousands of dollars on your next vehicle purchase. Remember to consult with a tax professional to determine the best strategy for your individual circumstances. The opportunity to combine these credits is limited, so act fast to maximize your savings!

Source: https://www.usatoday.com/story/graphics/2025/07/05/trump-big-beautiful-bill-car-tax-credits/84450714007/