We’ve got some tips on how to maximize savings.
Tax incentives that saved U.S. residents thousands of dollars on home efficiency upgrades, clean energy installations and electric vehicles are expiring this year. That means people who want to take advantage of them before they disappear have to act quickly.
“There is still time, but the clock is ticking,” said Zach Pierce, head of policy at Rewiring America, a nonprofit focused on electrification.
With thousands of dollars on the line and mere days or months to claim them, we’ve got some tips on how to maximize savings.Refresh my memory. What are these incentives?
The Inflation Reduction Act that passed in 2022 includes a slew of tax credits for electric vehicles and home efficiency upgrades.
The credits had two main goals: to help people afford cleaner alternatives like heat pumps and electric vehicles that can save them money, and to reduce greenhouse gas emissions that are the largest driver of climate change.
In addition to EVs, home upgrades that qualify include home energy audits, heat pumps, solar panels, water heaters, appliances, battery storage, car chargers and improvements to windows, doors, skylights, insulation and electrical panels.
Payback comes at tax filing time. For example, if you buy a heat pump and qualify for a $2,000 tax credit, you document that expense on your tax return, and you owe $2,000 less in taxes that year.
Some incentives have a cap. You can only get $1,200 of credit per year for most of the home improvements like insulation and efficient windows, and $2,000 of credit for heat pumps and water heaters. The big expenses, including geothermal heat pumps, rooftop solar and battery storage, aren’t capped.
