The Inflation Reduction Act of 2022 provided a brand new set of credits that will be in place until 2032. These Energy Efficiency Credits for both Homeowners and Businesses include the following…
1. Residential Energy Efficiency Home Improvement Credits
There’s a $1,200 maximum aggregate yearly tax credit for all building envelope components, home energy audits, and energy property. Electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and boilers have a separate aggregate yearly credit limit of $2,000.
2. Clean Vehicle Credit
A credit of up to $7,500 on the purchase of a new electric vehicle and a credit of up to $4,000 for a used EV is available this year. These credits are difficult to qualify for because they have several limitations related to income, battery capacity, and final assembly percentages of the vehicle inside the continental US.
3. Residential Clean Energy Credit
Taxpayers who make clean energy improvements to their homes may receive this credit of up to 30% based on the cost of new, qualified clean energy property. This one also has difficult and complicated qualifiers.
4. Business Energy Incentives
There are a myriad of new credits, deductions, and other incentives included in the Inflation Reduction Act. These include The Renewable Electricity Production Credit, The Commercial Clean Vehicle Credit, The Energy Credit Modifications, The Federal Solar Energy Tax Credit, The Commercial Building Energy Deduction, The Contractor Energy-Efficient Home Credits, The Clean Fuel Credits, and The Clean Energy Manufacturing and Security Investment Incentives.
These credits are not mutually exclusive. A taxpayer can do one or all of them.
Most of these credits have limitations. They’re an example of the government passing a law knowing that very few will qualify.
As one might expect, these are ridiculously complicated and difficult to understand. Before believing the nonsense that comes out of a salesman’s mouth telling you that you’ll automatically qualify for one of these, you might want to give us a call.
Let me leave you with this…
It’s an election year which normally means that there are tons of new tax laws put on the books so that either side of the aisle can get their slate elected. But this year is different.
No one’s passing anything.
Normally me and my staff are burning the midnight oil trying to learn and understand all of the new laws that affect our clients, but not this year. That makes this the perfect time for us to get you caught up.
This is the fourth in my series of educating all of you on the topics that will come up in our December Tax Planning Meetings. If I write about the topics we’ll discuss, it will simply make the tax planning we do for all of you that much more productive.
So please get your work into us today. If I don’t have up to date numbers on your companies, we won’t have much to discuss.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
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Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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