The time has come to go green to save some green! The recently passed Inflation Reduction Act of 2022 (IRA) includes rebates and tax credits that are good news for many homeowners and business owners. Here is some general information about a few tax credit opportunities. For full details, and to determine if you qualify, please contact us.
- Home appliance and improvement rebates. Depending on your family income, you may be eligible for up to $14,000 in rebates for purchasing energy-efficient appliances such as water heaters, heat pumps, stoves, and clothes dryers. Some other home improvements, like insulation, may also be eligible for rebates.
- Residential Clean Energy Credit. Extended and improved from its previous version, homeowners can receive a tax credit of up to 30% of the cost to install qualifying solar, wind, geothermal, or battery home energy systems.
- Energy Efficient Home Improvement Credit. This credit was also extended and expanded to offer qualifying homebuilders tax credits of up to $5,000 for building energy-efficient homes.
- Electric vehicle tax credits. More clean residential vehicles now qualify for the electric vehicle (EV) tax credit of up to $7,500 for all new qualifying EVs purchased, and up to $4,000 for used EVs. Commercial vehicles may also qualify for up to $7,500 on lighter vehicles, and up to $40,000 for heavier equipment. One interesting note – starting in 2024 you can take the credit as a discount at the dealership.
- Small business research tax credit. This expanded credit doubles the research and development tax credit to up to $500,000. Qualifying small businesses can still apply up to $250,000 toward social security payroll tax liability, and now apply up to $250,000 against Medicare payroll tax liability.
- Incentives for clean fuels. To keep this as simple as possible, let’s just say there are income and excise tax credits for sales and use of biodiesel and renewable diesel fuel.
Beware of the fine print – contact us for help
An investment in clean energy is a smart move, both for the environment and your pocketbook. These small changes may amount to significant savings over time. If you plan to take advantage of these tax credits, and we encourage you to do so, we are here to help. As with most legislation, you’ll want to understand requirements, income and credit/rebate limitations, and other details to ensure that you qualify. Contact us today, so we can look at your household or business situation and help you make the best decisions.