The Inflation Reduction Act of 2022 expanded and changed the rules where it comes to the solar energy credit and electric vehicles. Here is a quick breakdown of the credits along with links for further details.
Plug-In Electric Drive Vehicle Credit
For vehicles that were purchased and delivered on or after August 16, 2022, the final assembly of the vehicle must be within North America.
If you entered into a written binding contract to purchase a vehicle before the new law was enacted but didn’t take possession of the vehicle until after August 16, 2022, the final assembly requirement does not apply.
Any electric vehicle purchased and delivered before January 1, 2023, must still adhere to the original tax credit rules. Those rules start to phase-out the amount of the credit available after the first 200,000 cars are sold by manufacturers. A qualifying vehicle must be purchased or leased new and not for resale. The credit is not refundable, which means you must owe tax to get a benefit.
We are still awaiting additional IRS guidance regarding requirements in 2023 related to critical minerals and battery components.
More Details: https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d
EV Charger Tax Credit
Individuals can now claim 30% of hardware and installation costs for EV charging stations in their homes, up to a maximum $1,000 credit.
Previously Owned Clean Vehicle Credit Coming in 2023
This credit for used vehicle purchases applies after December 31, 2022, to dealer purchased used electric vehicles that are two model years old. The vehicle must be $25,000 or less and you must meet certain income limits. Contact us before purchasing to make sure you qualify!
Federal Solar Tax Credit
Congress has extended the 30% solar tax credit until 2032.
Key Takeaways:
- You claim the credit during the original year the system is installed.
- The system must be located at your main or second residence within the United States.
- You must purchase the system either outright or via financing. Leasing and/or electricity buy-backs by the solar company do not qualify.
More details: https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics