COLORADO (KOAA) — Coloradans are running out of time to cash in on thousands of dollars in federal tax breaks for electric vehicles. The federal Clean Vehicle Credit, worth up to $7,500 on a new EV and $4,000 on a used one, is set to expire at the end of the month.
Buyers have two options for claiming the incentive: filing for the credit on their tax return or transferring it directly to the dealer for an immediate discount. But to receive the full federal benefit, an eligible vehicle must be purchased or delivered by Sept. 30, 2025.
The program was created under the 2022 Inflation Reduction Act and was originally expected to run through 2032. However, a recent tax and spending-cut package passed by Congress shortened that timeline, making this the final week to take advantage of the federal incentive.
Joe Craig, an economics professor at the University of Colorado Colorado Springs, said the end of the credit could reshape demand.
“We’ve seen a huge surge in people buying electric vehicles the last two months. We should absolutely expect that EV sales will drop. I would be shocked if that didn’t happen after the tax credits went away,” Craig told News5.
Colorado drivers also have access to a state-level tax credit of up to $6,000 this year. That benefit will shrink starting in 2026, when credits drop to between $750 and $2,000.
For drivers weighing a switch to electric, the window to maximize savings is closing quickly. The federal deadline is Sept. 30, 2025.
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