The Inflation Reduction Act of 2022 is designed to combat inflation, invest in domestic energy production and reduce carbon emissions 40% by 2023 (Opens in a new tab). In fact, $369 billion has been allocated to energy security and climate change programs over the next 10 years.
Portions of this money can be obtained through energy tax credits for going green and taking actions to reduce your carbon footprint. These benefits will last until 2032, and it is possible for you to qualify for a hefty sum $10,000 (Opens in a new tab) in the credits. More information can be found at White House Clean Energy website (Opens in a new tab).
There are several ways to earn IRA energy tax credits. Keep reading to learn more about each of them.
Buy Energy Star appliances
By purchasing energy-efficient appliances, you can save hundreds thanks to the Inflation Act energy tax credits. Below are the products for which you can get credits energy star (Opens in a new tab).
Air source heat pumps
Tax credit amount: $300
Central air conditioning
Tax credit amount: $300
Gas, propane or hot water boiler
Tax credit amount: $150
Gas, propane or oil ovens and fans
Tax credit amount: $150
Gas, oil, propane water heater
Tax credit amount: $300
Electric heat pump water heater
Tax credit amount: $300
Advanced main air circulation fan
Tax credit amount: $50
Energy efficient home improvements
You can also save by investing in the following energy efficient home improvements.
insulation: Typical insulation equipment including batts, rolls, blow fibers, rigid sheets, expansion spray and cast-in-place.
Tax Credit Amount: 10% of the cost, up to $500
Bishop: Energy Star certified metal and asphalt roofs designed to reduce heat gain through pigmented coatings or coolant granules qualify.
Tax Credit Amount: 10% of the cost, up to $500
Windows, doors and skylights: Products must be Energy Star certified. You do not need to replace all the windows/doors/skylights in your home to qualify.
Tax Credit Amount: 10% of the cost, up to $500 (windows limited to $200)
electric car
If you purchase a new electric vehicle, you may be eligible to receive up to $7,500 (Opens in a new tab) If the vehicle was assembled in North America. However, the credits will only be available to individuals with incomes of less than $150,000, to single heads of household earning less than $225,000, and to couples with combined incomes of less than $300,000.
Used electric vehicle owners can get a tax credit of up to $4,000 (Opens in a new tab). The credit will only be applied to vehicles under $25,000. Credits are only eligible for individuals earning $75,000 or less, $112,500 for single households and $150,000 for married couples.
Home renewable energy systems
By installing the following home energy systems, you can get equal credit 30% of cost.
- Geothermal heat pumps
- Small wind turbines (residential)
- Solar energy systems (solar water heaters / solar panels)
- Fuel cells (residential fuel cells and microturbine system)
- Biomass fuel stoves
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