As the push for greener transportation grows, electric bikes (eBikes) have become increasingly popular across the United States. To encourage eco-friendly commuting, the federal government and many states offer tax credits and rebates that can save you hundreds or even thousands of dollars when purchasing an eBike.
In this comprehensive 2025 guide, we’ll break down the latest federal tax credit, state rebates, eligibility requirements, application steps, and money-saving tips — so you can get the most value out of your eBike purchase.
What Is the Federal Electric Bike Tax Credit?
The federal electric bike tax credit is a government incentive designed to reduce the cost of purchasing a new eBike that meets specific safety and performance standards. In 2023, the Inflation Reduction Act introduced a tax credit for electric bikes to help cut greenhouse gas emissions and promote sustainable transportation.
Key points:
-
The credit covers 30% of the purchase price, up to a maximum of $1,500.
-
It applies only to new eBikes purchased on or after January 1, 2023.
-
The credit is non-refundable, meaning it can only reduce your tax liability to zero, but you won’t get a refund beyond your tax owed.
2025 Federal eBike Tax Credit Eligibility Requirements
To qualify for the federal tax credit, your eBike must meet the following criteria:
-
Equipped with a pedal-assist system (throttle-only bikes typically do not qualify).
-
Maximum motor power of 750 watts (1 horsepower) or less.
-
Maximum speed limited to 20 mph (32 km/h) with motor assistance.
-
Purchased new from a retailer or manufacturer that complies with IRS certification requirements.
Note: Used eBikes do not qualify for the federal tax credit.
How to Claim Your 2025 Federal Electric Bike Tax Credit
-
Purchase a qualifying eBike from a certified seller.
-
Keep your sales receipt and product information for your tax records.
-
When filing your federal income tax return, complete IRS Form 8936 (Qualified Plug-in Electric Drive Motor Vehicle Credit).
-
Include the form with your tax return.
-
Your tax credit will reduce your federal tax liability dollar-for-dollar, up to $1,500.
If you use a tax professional or tax software, they should prompt you for this credit if you provide the correct information.
State-Level eBike Rebates & Incentives to Know in 2025
In addition to the federal credit, many states and municipalities offer their own rebates and incentives. These vary widely by location:
| State | Maximum Rebate Amount | Eligibility & Notes |
|---|---|---|
| California | Up to $1,250 | Low-income residents prioritized via CalEVIP |
| New York | Up to $600 | Available to all residents, first-come, first-served |
| Colorado | Up to $750 | Must submit proof of purchase online |
| Washington | Up to $700 | Often combined with federal credit |
| Oregon | Up to $1,300 | Limited time, requires compliance with state standards |
Tip: Always check your state's official transportation or energy office website for the most current rebate programs and application deadlines.
Tips to Maximize Your Savings When Buying an eBike in 2025
-
Stack federal and state incentives for the biggest discount.
-
Buy from authorized dealers who provide proper documentation.
-
Time your purchase during sales tax holidays or promotional events.
-
Keep detailed records of your purchase, receipts, and compliance info.
-
Consider local utility or city programs, which sometimes offer additional rebates or perks like free helmet giveaways or discounted gear.
Frequently Asked Questions (FAQ)
Q1: Can I claim the tax credit on a used eBike?
No. The federal tax credit only applies to new eBikes purchased from certified retailers.
Q2: Does the tax credit apply to throttle-only eBikes?
Generally no. Most federal tax credits require pedal-assist systems.
Q3: Can I combine state rebates with the federal tax credit?
Yes, most state rebates can be combined with the federal credit, maximizing your savings.
Q4: How do I know if a dealer is certified for the tax credit?
Ask the retailer directly or check IRS guidelines for approved sellers.
Final Thoughts
The 2025 federal tax credit combined with state rebates makes now a perfect time to invest in an electric bike. Whether you’re commuting, exercising, or just enjoying the outdoors, an eBike offers a fun and environmentally friendly way to get around — with significant savings when you leverage available incentives.
Don’t miss out on these programs. Plan your purchase, confirm eligibility, and claim your tax credit to make your 2025 eBike experience both affordable and rewarding!
