President Joe Biden signed the Inflation Reduction Act (IRA) of 2022 into law on August 16, 2022. The budget reconciliation act narrowly passed the senate with a 51-50 with the vice president, Kamala Harris, casting a tiebreaking vote.
A majority of the bill deals with business taxpayers, however there are some credits available for individual taxpayers outlined here.
Residential Clean Energy Credits
The credit for solar energy property (solar panels for your primary residence) now renamed the Clean Energy Credit, has been increased to 30% of the installation cost through 2032. This replaces the Residential Energy Efficient Property Credit.?).
The Clean Energy Credit also applies to energy HVAC systems, heat pumps, and efficient windows and doors. The lifetime maximum for this credit is $1,200. If you have already taken the credit in your lifetime there are no further credits available.
The Clean Vehicle Credit (replacing the Qualified Plug-in Electric Drive Motor Vehicle Credit) for the purchase of clean vehicles (plug in electric or fuel cell) is extended through 2032 and expanded by eliminating the limitation based on the number of vehicles produced by a specific manufacturer.
However, the final assembly of the vehicle is required to be in North America after August 16, 2023 to meet the new credit requirements. The maximum credit is unchanged at $7,500, with limitations.
There is also a new credit available for the purchase of used clean vehicles, up to $4,000, through 2032 and limited by taxpayer income.
The IRA of 2022 extends the premium tax credits individuals through 2025. If your income is over 400% of the poverty line you may be eligible for credits on your medical insurance premiums through the exchange if you meet other eligibility requirements.
Contact a member of our team today to learn more about maximizing any of the credit opportunities.
Dana R. Borys, an Accountancy Corporation is a boutique tax consulting, compliance, and representation firm working with affluent individuals and owners/officers/founders of start-up/emerging growth companies. Building connections beyond the code.