If you’re thinking about going electric in the North Star State, Minnesota EV tax credits can make your purchase much more affordable. While the state rebate program has changed in 2025, there are still ways for Minnesota residents to save thousands on a new or used electric vehicle (EV). In this guide, we’ll break down current incentives, eligibility requirements, and how to stack federal, state, and utility benefits for maximum savings.
Understanding Minnesota EV Tax Credits
When people talk about Minnesota EV tax credits, they’re often referring to two different types of incentives:
- Federal EV Tax Credit – A nationwide program worth up to $7,500 for qualifying new EVs and plug-in hybrid vehicles (PHEVs).
- Minnesota State EV Rebate – A state-level rebate worth up to $2,500 for new EVs and $600 for used EVs (now fully claimed but may reopen in future funding cycles).
Federal EV Tax Credit
The federal credit is available for eligible vehicles that meet requirements under the Inflation Reduction Act:
⚡The Federal EV Tax Credits expire on September 30, 2025
- Up to $7,500 off qualifying new EVs or PHEVs.
- Up to $4,000 off used EVs meeting eligibility criteria.
- Must meet final assembly in North America and battery sourcing requirements.
- Income limits apply: $150,000 for individuals, $300,000 for joint filers.
- Can be applied at the dealership as an instant discount at the point of sale.
Minnesota State EV Rebate: 2023–2025 Overview
Minnesota launched its own rebate program on May 25, 2023, offering:
- $2,500 rebate for new EVs priced at $55,000 or less (MSRP).
- $600 rebate for used EVs priced at $25,000 or less.
- Available to Minnesota residents, businesses, and nonprofits.
- Limit of one rebate per household or business per year.
- Applied at the point of sale through participating dealers.
Current Status (August 2025)
All allocated funds have been claimed, and no new rebate applications are being accepted. However, the Minnesota Department of Commerce may reopen applications if additional funding becomes available—so it’s worth staying on their notification list.
Local Utility EV Incentives
Even without the state rebate, Minnesota drivers can tap into utility-based incentives, such as:
- Xcel Energy – Up to $500 for a Level 2 home charger installation when enrolling in EV charging programs.
- Minnesota Power – Off-peak charging rates plus up to $500 in charger rebates.
- Local co-ops – Some offer $250–$750 rebates for charger installation.
Tax Considerations
The Minnesota rebate (when available) is taxable income under current state and federal guidelines, meaning recipients may receive a Form 1099-MISC. The federal EV credit, however, is a non-refundable tax credit and is not considered taxable income.
How to Maximize Minnesota EV Tax Credits in 2025
- Check Federal Eligibility – Use the IRS’s EV lookup tool before shopping.
- Shop Dealer Inventory – Focus on models that qualify for both the federal credit and any active utility rebates.
- Claim Utility Rebates – Combine your EV purchase with charger installation savings.
- Monitor State Updates – Watch for Minnesota Department of Commerce announcements about new funding.
Final Thoughts
Even though the Minnesota state rebate is currently on hold, Minnesota EV tax credits still offer substantial savings through the federal credit and utility incentives. Acting now can help you secure the best deals before future policy changes—and with EV popularity rising, demand for incentives will only grow.
Ready to start your EV journey?
Check federal credit eligibility, explore qualifying EV models, and talk to your local utility today to maximize your incentives.
