How Do Electric Car Tax Credits Work
in Massachusetts?
Massachusetts drivers weighing an electric vehicle will find that some of the old answers have changed. The federal EV tax credit has ended. The state’s MOR-EV rebate is still available, and a federal auto loan interest deduction can apply to certain U.S.-assembled vehicles. Our team at Mastria Cadillac, your Cadillac dealership near Bridgewater, can explain which of these fit the EV you’re considering.
Incentives are only part of the math. EV owners skip oil changes and gas station stops, and our EV vs. gas cost comparison shows how those savings add up.
One catch worth knowing up front: the Massachusetts EV rebate has a vehicle price cap, so it doesn’t apply to every new Cadillac EV. The FAQs below break down what applies and what doesn’t, or you can contact our team for details on a specific vehicle.
Is the Federal EV Tax Credit Still Available?
No. The federal Clean Vehicle Tax Credit ended for vehicles acquired after September 30, 2025. It was worth up to $7,500 on a new EV and up to $4,000 on a used one, and it no longer applies to a Cadillac EV you buy today. The federal tax credit for home charging equipment has also ended for equipment placed in service after June 30, 2026.1 If you acquired an EV on or before September 30, 2025, ask a tax professional whether you can still claim the credit.
Do EVs Qualify for the Auto Loan Interest Deduction?
Some do. Through tax year 2028, you can deduct up to $10,000 a year in interest on a loan for a new, personal-use vehicle that had its final assembly in the United States.1 The loan must have been taken out after December 31, 2024, and the deduction phases out for higher earners, starting at $100,000 of modified adjusted gross income for single filers and $200,000 for joint filers. Leases don’t qualify.
Among Cadillac’s electric SUVs, the LYRIQ and VISTIQ are assembled in Tennessee, while the OPTIQ is assembled in Mexico and doesn’t meet the U.S. final-assembly requirement. This is a deduction, not a credit, so it lowers your taxable income and your actual savings depend on your tax bracket. You’ll need to include the vehicle’s VIN on your return, and you can confirm where a vehicle was assembled on its window sticker or with the NHTSA VIN decoder.
Am I Eligible for the MOR-EV Rebate in Massachusetts?
Massachusetts runs the MOR-EV program, a state rebate (not a tax credit) that pays $3,500 toward a new electric vehicle and the same amount toward an eligible used one.1 Two add-ons can bring the total to $6,000: $1,000 for trading in an older gas or diesel vehicle, and $1,500 through MOR-EV+ if you take part in an income-qualifying program.
To qualify for the new-vehicle rebate, you generally need to be a Massachusetts resident (or a Massachusetts business) buying or leasing a vehicle with a total MSRP of $55,000 or less, and you must keep it or lease it for at least 36 months. Used vehicles must cost $40,000 or less, come from a licensed Massachusetts dealer and meet income requirements. You can apply within 90 days of your purchase or lease, or receive the rebate at the point of sale from a participating dealership. Rebates are paid from limited funds.
