August 14, 2025

If you're considering purchasing an electric vehicle, act before September 30, 2025, to get a $7,500 tax credit.

Two federal tax credits, the Clean Vehicle Credit and the Commercial Clean Vehicle Credit, can save you up to $7,500, but they expire on September 30, 2025. The Commercial Clean Vehicle Credit is where the real opportunity lies for high-income dentists.

Here's what you need to know:

Clean Vehicle Credit (Personal) – Limited Use for Most Dentists

• Credit Amount: Up to $7,500 for new qualifying EVs.
  
  
• Limits: Strict income caps. No credit if your modified adjusted gross income exceeds $300K (married) or $150K (single). Vehicle price caps also apply ($55K for cars, $80K for SUVs/trucks/vans).
  
  
• Vehicle Requirements: Final assembly in North America and compliance with battery sourcing rules.
  
  
• Reality for Dentists: With high incomes, most private practice owners don’t qualify.
  
  

The Better Option - Commercial Clean Vehicle Credit

If your dental practice purchases an EV for business use, you can bypass the income and price restrictions of the personal credit.

• Credit Amount:
   
  • Light- and medium-duty vehicles (<14,000 lbs): Up to $7,500.
    
    
  • Heavy-duty vehicles (≥14,000 lbs): Up to $40,000.
    
    
    • Note: This heavy-duty credit is primarily for very large fleet vehicles that would not apply to the vast majority of dental practices.
• Advantages:
  
  
  • No income limit: High earners qualify.
    
    
  • No MSRP cap: Luxury EVs qualify.
    
    
  • No assembly or battery sourcing rules: Foreign-made EVs still eligible.
    
    
• Business Use Requirement: The Vehicle should be used >50% for business. Partial business use = proportional credit.
  
  
• Depreciation Interaction: Credit reduces the depreciable basis, but Section 179 or bonus depreciation can still offer large deductions.
  
  

Example:

A practice buys a $90,000 electric SUV for business use. Even if personal use is 20%, you can claim 80% of the $7,500 credit ($6,000) plus significant depreciation deductions.

Home EV Charger Credit

You can also claim a credit for installing a home charging station, but act now, as this too will disappear after 9/30/2025:

• Amount: 30% of cost, up to $1,000.
  
  
• Eligibility: Available to all taxpayers, with no income limit.
  
  
• How to Claim: File IRS Form 8911.
  
  
• Business Installations: Larger credits possible for practice-based chargers.
  
  

Planning Tips for Dentists

1. Decide on Credit Path: If your income exceeds the personal EV limit, plan for the commercial credit via your practice.

2. Choose the Right Vehicle: Almost any new EV qualifies for commercial credit. Match the vehicle to your practice image and needs.

3. Title It Correctly: Purchase or lease under your practice name or your name DBA the practice.

4. Get Commercial Insurance: You will need a commercial car insurance policy in the practice's name, but the good news is that this expense is deductible.

5. Document Business Use: To get the full credit, keep mileage logs showing more than 50% business use. MileIQ is a great app for this.

6. Time Your Purchase: Target delivery and “in service” date before September 30, 2025.

7. Install a Charger: You can claim the $1,000 home credit for convenience and savings, but you must do so before September 30, 2025.

8. Coordinate with Depreciation: Combine credits with Section 179 or bonus depreciation for maximum tax impact.

Quick Comparison Table

For most high-earning dentists, the Commercial Clean Vehicle Credit is the key to unlocking EV tax savings. Buying through your practice lets you sidestep income and price caps, access the same $7,500 credit, and pair it with business deductions. Adding a home charger and claiming its credit is an easy bonus.

Remember, this credit ends after September 30, 2025. Act soon to lock in today's generous incentives.

Not sure where to start? Contact us today!

References

Internal Revenue Service. (2024, April). Commercial clean vehicle credit. U.S. Department of the Treasury. https://www.irs.gov/credits-deductions/commercial-clean-vehicle-credit.

Internal Revenue Service. (2024, April). Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two- and Three-Wheeled Plug-in Electric Vehicles). U.S. Department of the Treasury. https://www.irs.gov/forms-pubs/about-form-8936.

Internal Revenue Service. (2024, April). Alternative fuel vehicle refueling property credit. U.S. Department of the Treasury. https://www.irs.gov/credits-deductions/alternative-fuel-vehicle-refueling-property-credit.

Kiplinger. (2024, May 1). IRS explains EV tax credit rules for 2024 and beyond. Kiplinger’s Personal Finance. https://www.kiplinger.com/taxes/irs-explains-ev-tax-credit-rules.

Tax Foundation. (2023, August 31). What’s in the Inflation Reduction Act’s electric vehicle tax credit provisions. Tax Foundation. https://taxfoundation.org/inflation-reduction-act-ev-tax-credit/.

U.S. Department of Energy. (2024). Federal tax credits for new & used electric vehicles. Alternative Fuels Data Center.