Ohioans will have to act quickly if they want to make use of federal tax credits for buying electric vehicles and energy efficient appliances.
The "big beautiful bill" President Trump signed into law is eliminating a slate of clean energy tax credits established by the 2022 Inflation Reduction Act, legislation aimed at reducing planet-warming greenhouse gas emissions and making green energy cheaper.
A $7,500 tax credit for buying a new EV and a $4,000 tax credit for buying a used EV are both ending Sept. 30. And a tax credit worth up to $3,200 for energy efficient home improvements is expiring Dec. 31.
Nikki Vandivort is a fellow in Cincinnati’s Office of Environment and Sustainability. She says the end of these incentives will put energy-saving upgrades out of reach for some Ohioans, at a time when electricity prices are rising throughout the state.
The clean energy tax credits were originally designed to last through the 2030s.
With new end-dates just months away, Vandivort is encouraging people who are thinking about buying eligible EVs, water heaters, and insulation to make those purchases sooner rather than later.
“If folks were considering this and they wanted to take advantage of the tax credits, try and get those expenditures done,” Vandivort said.
Here are some tips on using federal clean energy tax credits before they disappear.
Looking to buy an EV? Make sure you and the car qualify
Tax credits can make buying new and used EVs cheaper for consumers, if used before October. However, there are some limits on who and what vehicles are eligible for the credits.
For new EV purchases, your income for the current or prior year must be:
- $300,000 or less for joint filers and surviving spouses
- $225,000 or less for head of household filers
- $150,000 or less for other filers
The new vehicle you buy also must be qualified as an eligible model. You can see a full list on the fueleconomy.gov website. Brands including Chevrolet, Hyundai, and Tesla have models eligible for the $7,500 tax credit.
For used EV purchases, your income for the current or prior year must be:
- $150,000 or less for joint filers and surviving spouses
- $112,500 or less for head of household filers
- $75,000 or less for other filers
The used vehicle you buy also must be at least two years old, priced under $25,000 and have only one previous owner. You can see a full list of eligible models on the fueleconomy.gov website.
The home EV charging tax credit for up to $1,000 also is ending soon. At-home chargers have to be placed in service by June 30, 2026 to count for the credit. Check your eligibility on the IRS’ website.
EV buying advice from an expert
Gary Heaton is president of Drive Electric Cincinnati, a volunteer organization trying to make it easier for people to buy and own EVs.
He recommends researching the tax credit rules before heading to a dealership or browsing online car retail sites, like Carvana.
“You just need to do your homework,” Heaton said.
Once you select and pick up your EV, you’ll sign a form that lets the dealer collect your tax credit, so you can receive the discount at the time of purchase.
Heaton says to be sure you leave the dealership with IRS Form 15400 in hand, or with plans to have it promptly sent to you.
What about energy efficient home improvements?
The Energy Efficient Home Improvement Credit can help you save on new appliances, from air conditioners to heat pumps, installed before the end of the year.
The maximum credit you can claim is $3,200. That includes $1,200 for improvements such as efficient air conditioning units, water heaters and insulation, and $2,000 for heat pumps, heat pump water heaters, and biomass stoves/boilers.
You can figure out and take the credits with IRS Form 5695.
Another incentive, the Residential Clean Energy Credit, is being phased out by the end of the year as well. It covers 30% of clean home energy systems such as solar panels, wind turbines, and geothermal heat pumps.
Are there any other programs that make energy upgrades more affordable?
If you aren’t in a position to buy efficient appliances before the tax credits end, you can still find savings through other government programs.
Vandivort says Ohio likely will launch its home energy efficiency and electrification rebate program by the end of the year. The state is receiving nearly $250 million to help residents save on home energy costs, according to the Department of Development.
“There will be rebates for single-family and multi-family — so, good news for folks, especially from low-income backgrounds,” Vandivort said.
Indiana opened up its home energy rebate program this spring. Kentucky's, meanwhile, is still in development, but you can sign up for updates.
Read more: