Last Chance for $7,500 EV Tax Credit: Loophole Sidesteps OBBBA Deadline

Core Points - The "One Big Beautiful Bill" Act (OBBBA) signed by President Trump on July 4 sets the spending and tax policies for his second term, extending many tax rates from the 2017 tax bill and implementing spending cuts [1] - A significant aspect of the OBBBA is the 12% reduction in Medicaid spending and the elimination of the electric vehicle (EV) tax credit by September 2025 [2] - The EV tax credit, originally part of the Inflation Reduction Act (IRA) of 2022, provided a $7,500 tax credit for qualifying new EV purchases, which will be terminated by the OBBBA [3] - A loophole in the OBBBA allows EV buyers to claim the tax credit if they have a binding purchase contract and payment made by September 30, 2025, even if the vehicle is delivered later [4][5] - This loophole provides flexibility for buyers to secure the $7,500 EV tax credit by signing a contract and making a payment before the deadline [6]