2027 EV Incentive Eligibility Checker
See what federal and state EV incentives you may qualify for in 2027 — including the auto loan interest deduction that replaced the $7,500 federal credit.
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What Replaced the EV Tax Credit? 2027 Guide to Federal and State Incentives
The $7,500 federal EV tax credit ended September 30, 2025. It was eliminated by the One Big Beautiful Bill Act (OBBBA). The used EV credit of up to $4,000 ended on the same date.
In 2027, the main federal replacement is an auto loan interest deduction of up to $10,000 per year for vehicles assembled in the United States — gas, hybrid, or electric. State-level EV rebates still exist in some states, but the amounts and rules vary significantly. Use the 2027 EV Incentive Eligibility Checker to see what you may qualify for based on your ZIP code, income, and vehicle.
Key Takeaways
- The federal Clean Vehicle Credit (IRC §30D, up to $7,500) and Used Clean Vehicle Credit (IRC §25E, up to $4,000) were eliminated effective September 30, 2025.
- The primary federal replacement is an above-the-line auto loan interest deduction of up to $10,000 per year for US-assembled vehicles.
- State EV rebate programs still exist in some states, including Colorado, Illinois, New Mexico, New Jersey, and Massachusetts — but rules and funding change frequently.
- Some incentives can be stacked; others cannot. Stacking rules vary by program.
- These are estimates and general information, not tax advice. Verify eligibility with the IRS, your state energy office, and your utility before relying on any figure.
The $7,500 Federal EV Tax Credit Ended in 2025
The Clean Vehicle Credit under IRC §30D provided up to $7,500 for qualifying new electric vehicles. The Used Clean Vehicle Credit under IRC §25E provided up to $4,000 for qualifying used EVs. Both were eliminated for vehicles placed in service after September 30, 2025 under the One Big Beautiful Bill Act.
This means that in 2027, there is no federal EV purchase tax credit for new or used electric vehicles. If you see a page or calculator still referring to the $7,500 credit as active, that information is outdated.
What this means for 2027 buyers
If you are planning to buy or lease an EV in 2027, the federal incentive landscape is fundamentally different from 2024–2025. The purchase credit no longer exists. The replacement is a different type of benefit — a deduction for auto loan interest — with its own eligibility rules.
What Replaced It: The Auto Loan Interest Deduction
The OBBBA introduced a new above-the-line deduction for auto loan interest of up to $10,000 per year. Key features:
- Applies to vehicles assembled in the United States
- Applies regardless of powertrain (gas, hybrid, or electric)
- Caps at $10,000 per year in deductible interest
- Is a deduction, not a credit — it reduces taxable income, not tax owed directly
Because this is a deduction rather than a credit, the actual tax benefit depends on your marginal tax rate. A $2,000 deduction for someone in the 22% bracket reduces federal tax by roughly $440, not $2,000. This is a significant difference from the old $7,500 credit, which was a direct reduction of tax liability.
Up to $10,000 per year
The $10,000 cap applies to the amount of deductible interest, not to the vehicle price or loan amount. Most buyers will not reach the cap in a single year because first-year interest on a typical auto loan is often in the $2,000–$4,000 range depending on loan amount, rate, and term.
US-assembled vehicles only
To qualify for the deduction, the vehicle must be assembled in the United States. This is different from the old EV credit's North American assembly and battery-sourcing requirements. You can check your vehicle's assembly location using the VIN or the manufacturer's documentation.
Who Qualifies for the Auto Loan Interest Deduction?
Income limits
Income limits for the auto loan interest deduction are set by the OBBBA. Because these are new provisions and may be subject to clarification by the IRS, verify your specific eligibility with a tax professional or the IRS before relying on any estimate. The eligibility checker uses your inputs to estimate the deduction but cannot confirm eligibility.
Vehicle assembly requirement
The vehicle must be assembled in the United States. This includes vehicles from manufacturers with US assembly plants, regardless of the brand's country of origin. If your vehicle was assembled outside the US, the deduction does not apply.
New vs used vs lease
The deduction applies to auto loan interest, so it is most directly relevant to financed purchases (new or used). Leases are generally not eligible because the lessee does not own the vehicle and does not pay interest on a purchase loan in the same way.
State EV Incentives in 2027
With the federal purchase credit gone, state programs have become the primary purchase-incentive layer. However, state programs vary dramatically and many are expiring, changing, or "to be determined" for 2027.
States with verified 2027 programs
| State | Program Type | Status / Notes |
|---|---|---|
| Illinois | EV rebate | $2,000–$4,000 through June 2027; up to $5,000 for low-income applicants from July 2027. Verify with Illinois EPA. |
| Colorado | State tax credit | 2027 light-duty EV credit amount is "to be determined." Check Colorado Energy Office for updates. |
| New Mexico | State tax credit | Program exists; verify current 2027 rules with the state. |
| New Jersey | State rebate | Program exists; verify current 2027 rules with the state. |
| Massachusetts | State rebate | Program exists; verify current 2027 rules with the state. |
Note: The table above reflects information available as of September 2026. State programs change frequently. Always verify with the relevant state agency before relying on any figure.
How to check your state
The U.S. Department of Energy's Alternative Fuels Data Center (AFDC) maintains a searchable database of state and federal laws and incentives. This is the most authoritative starting point for state-level information. The 2027 EV incentives by state comparison page on this site summarizes verified programs, but AFDC remains the primary source.
How to Stack Federal, State, and Utility Incentives
Stacking rules vary. Some general principles:
- The federal auto loan interest deduction is a tax deduction. It does not "stack" with other purchase incentives in the same way a credit would — it simply reduces taxable income.
- State rebates are typically administered by state agencies and may have their own rules about combining with other programs.
- Utility rebates are usually for home charger installation rather than vehicle purchase, and are administered by the utility.
- Some programs explicitly prohibit combining with others. Check the terms of each program.
Examples
A buyer in Illinois who finances a US-assembled EV might be able to claim the federal loan interest deduction (if eligible) and an Illinois state rebate (if income-eligible and the vehicle meets program rules). A buyer in a state with no active EV rebate would only have the federal deduction and any utility charger rebate they qualify for.
Because rules are program-specific, the eligibility checker estimates a combined total but shows each layer separately so you can verify each one.
Used EV Incentives in 2027: What's Left?
The federal Used Clean Vehicle Credit (up to $4,000) was eliminated on September 30, 2025. In 2027, there is no federal used EV credit.
Some states may still offer used-EV rebates or credits. These are less common than new-EV programs. Check your state energy office or the AFDC database. The used EV rebate checker summarizes verified state programs for used EVs.
EV Charger Rebates in 2027
The federal tax credit for home EV charger installation (IRC §30C) has been subject to policy changes. Some state and utility programs for home charger installation remain active.
Because the federal charger credit status has been in flux, verify the current status with the IRS or a tax professional before claiming it. Many utilities offer their own charger rebates, which are independent of federal programs. Contact your utility directly to confirm what is available in your area.
Example: 2027 EV Purchase with Incentives
This is an illustrative scenario using the methodology described below. Actual results will vary based on your specific situation.
Consider a buyer in Illinois with a modified AGI of $75,000 (single filer) purchasing a new US-assembled EV with an MSRP of $45,000. They finance $40,000 at 6% APR for 60 months.
- Federal loan interest deduction (estimated): First-year interest is approximately $2,348. This is below the $10,000 cap. As a deduction, the tax benefit depends on the buyer's marginal rate.
- Illinois state rebate (estimated): Based on the income tier, approximately $4,000.
- Utility rebate: Depends on the utility. Enter your actual utility rebate in the checker if you know it.
The eligibility checker shows these as separate line items so you can verify each one with the relevant authority.
Frequently Asked Questions
Is there still an EV tax credit in 2027?
No. The federal Clean Vehicle Credit and Used Clean Vehicle Credit were eliminated effective September 30, 2025. Some state programs still exist, but there is no federal purchase tax credit for EVs in 2027.
What replaced the $7,500 EV tax credit?
The primary federal replacement is an auto loan interest deduction of up to $10,000 per year for US-assembled vehicles. It is a deduction, not a credit, so the tax benefit depends on your marginal tax rate.
How does the auto loan interest deduction work?
It allows you to deduct up to $10,000 per year in auto loan interest from your taxable income, provided the vehicle was assembled in the United States. Because it is a deduction rather than a credit, it reduces taxable income rather than directly reducing tax owed.
Which states still have EV rebates in 2027?
Several states have active programs, including Illinois, Colorado, New Mexico, New Jersey, and Massachusetts. Program details, amounts, and eligibility rules vary. Check the AFDC database or your state energy office for current information.
Can I claim both federal and state incentives?
It depends on the specific programs. The federal deduction and state rebates are administered separately, but some programs have rules about combining with others. Check the terms of each program.
Does the deduction apply to used EVs?
The auto loan interest deduction applies to vehicle loans generally, including used vehicles, provided the vehicle was assembled in the United States. Verify specific eligibility with the IRS.
What if my EV wasn't assembled in the US?
The auto loan interest deduction requires US assembly. If your vehicle was assembled outside the United States, the deduction does not apply.
Is leasing better than buying for incentives in 2027?
Leases are generally not eligible for the auto loan interest deduction because the lessee does not pay interest on a purchase loan. Some state programs may have different rules for leases. Review the terms of any state program you are considering.
Methodology and Sources
This article reflects information available as of September 2026. The following sources were used:
- Federal credit elimination and OBBBA replacement: One Big Beautiful Bill Act (OBBBA); IRS guidance on the auto loan interest deduction.
- State incentive data: U.S. Department of Energy Alternative Fuels Data Center (AFDC); state energy office publications (including Illinois EPA, Colorado Energy Office).
- Vehicle assembly: Manufacturer documentation and NHTSA VIN data.
Estimates vs. facts: Federal policy information in this article is based on enacted legislation. State program details are based on information published by the relevant state agencies as of the date noted. Calculations in the eligibility checker are estimates based on user inputs and verified program rules. They are not official determinations of eligibility.
Limitations: State and utility programs change frequently. This article does not constitute tax, legal, or financial advice. Verify all figures with the relevant authority before making a decision.
Last Updated: September 2026
- IRS — Clean Vehicle Tax Credit
- U.S. Department of Energy — Alternative Fuels Data Center: Federal and State Laws and Incentives
- U.S. Environmental Protection Agency — Green Vehicle Guide
- U.S. Department of Energy — Office of Energy Efficiency & Renewable Energy: Electric Vehicles
- NHTSA — VIN Decoder (vehicle assembly and specification lookup)