The recently passed Inflation Reduction Act expanded on several tax incentives for taxpayers that choose energy efficient alternatives. Some of the key changes include:
- The Act increased the nonrefundable personal tax credit for having qualified property, such as solar panels, installed on a taxpayer’s residence to 30% of the cost of the property and installation through 2034.
- The Act increased the nonbusiness energy property credit to 30% for qualified energy efficient improvements, such as windows or doors. Annual credit limits still apply but have been increased. There is no longer a lifetime credit limitation.
- For certain new clean vehicles (electric vehicles), beginning in 2023 the maximum potential credit is $7,500 for vehicles with an MSRP under $55,000. There will be income limitations on this credit.