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EV's, Home EV Charger, Energy Improvements, Rebates &/or Credits

**Please check with your tax consultant**





Below is from a newsletter by U.S. Congressman Jimmy Panetta, dated March 31, 2023 United States Representative 19th Congressional District, California




Up to $7,500 in Credits for New Clean Vehicles Purchased in 2023 or After The Inflation Reduction Act modified and expanded federal tax credit 30D for 10 years, in doing this it made it less expensive to purchase a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV). To qualify for the tax credit, the buyer, the vehicle, and the sale must meet the new eligibility requirements laid out under the law. Qualifying Buyers must purchase the car for their own use, use primarily in the U.S., and have a modified adjusted gross income of less than $150,000 (or $300K for joint filers). Qualifying vehicles must have a Manufacturer Suggested Retail Price (MSRP) of less than $55K (or $80K for vans, SUVs, or pick-up trucks), and meet certain battery manufacturing and component criteria. (Note: these manufacturing and component criteria are not in effect until after the IRS issues the appropriate regulations – expected spring 2023.) To claim the credit, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) with your tax return. You will need to provide your vehicle's VIN. If you are interested in learning more about this tax credit, click here. There is also a credit available to those who purchased new EV plug-ins before 2023, you can find information about that tax credit here.

Up to $4,000 in Credits for Used Clean Vehicles Purchased in 2023 or After The Inflation Reduction Act established a new tax credit called the Previously Owned Clean Vehicle Credit (25E) to make it more affordable for consumers to purchase used EVs. Qualifying buyers can use this credit to get a discount of 30% off the cost of a used EV—up to a maximum of $4K. To qualify for this credit, buyers must have a MAGI of less than $75K (or $150K for joint filers). Qualifying vehicles must have an MSRP of less than $25K, weigh less than 14,000 pounds, and be at least two years old (model year must be at least 2 years older than the year of sale.) Purchases must be made through a dealer. For a list of qualified vehicles, click here. To claim this credit, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles and New Clean Vehicles), and file it with your tax return for the year you took possession of the vehicle to claim the used clean vehicle credit. You will need to include the vehicle identification number (VIN) on the form. If you are interested in learning more about this tax credit, click here. Up to $1,000 in Credits for Installing a Home EV Charger The Inflation Reduction Act includes a provision incentivizing businesses and homeowners to install EV chargers by expanding the existing tax credit known as the Alternative Fuel Vehicle Refueling Property Credit (30C) and extending it for 10 years. Homeowners residing in eligible lower-income or rural census tracts who purchase qualified residential fueling equipment between January 1, 2023, and December 31, 2032, can get a tax credit of 30% of the cost of installing a home EV charger on their property—up to a maximum of $1K. The State of California also offers the Residential Electric Vehicle (EV) Charging Station Financing Program. More information can be found here. The U.S. Department of Energy has a searchable database on its website that can help you find state tax credits and rebates that might help offset or lower the cost of your EV charger and EV charging equipment. For more information on the different kinds of EV chargers available, click here. Because the climate bill is still new, government agencies have not yet updated their websites to reflect changes made in incentives. The IRS has released an updated 8911 form, which can be used to claim this credit, found here. For more information on the different kinds of EV chargers available, click here. Up to a 30% Tax Credit for Residential Clean Energy Property and Residential Energy Efficiency Improvements The Residential Clean Energy Credit provision of the Inflation Reduction act provides a 30 percent tax credit to lower the installation cost of residential clean energy, including rooftop solar, wind, geothermal, and battery storage. The Residential Clean Energy Credit offers more households access to and freedom to choose renewable energy that can lower monthly energy bills and cut air pollution from power plants. The following residential clean energy expenditures are eligible for a Residential Clean Energy Property Credit of 30% of the cost:

  • Solar panels;

  • Solar water heaters;

  • Fuel cell property expenditures;

  • Small wind turbines;

  • Geothermal heat pumps; and

  • Battery storage systems.

For information on qualifying purchases from Energy Star, click here. For the IRS’ FAQ on the clean energy credit, click here. For the Department of Energy’s guide to the Rooftop Solar tax credit, click here. The energy efficiency credit provides a 30% credit for residential efficiency and electrification upgrades, up to $3,200 per year. Provided they increase efficiency, eligible upgrades include:

  • Heat pumps and heat pump water heaters;

  • Insulation;

  • Doors;

  • Windows; and

  • Electrical panels.

For a more detailed summary of the clean energy and energy efficiency tax credits, see Rewiring America’s Fact Sheet. To claim this credit, complete the IRS Form 5695, and attach it to your tax returns.

Partial Tax Credit for an Energy Assessment Home energy assessments are conducted by professionals that have industry-accepted credentials. Professional energy assessments generally go into detail to assess your home's energy use. The energy assessor will do a room-by-room examination of the residence, as well as a thorough examination of past utility bills. The home assessor will gather information and produce a report including characterizations of your home and action you can take to reduce your home's energy use while increasing the comfort of the living space. Check out the Energy Saver 101 home energy audit infographic to get an idea of what energy assessors look for and to learn more about the special tools they use to conduct an assessment. The Inflation Reduction Act offers a partial tax credit for home energy assessments. Please remember to save your receipts and any other relevant records as you go so that you can either accurately account for the purchase when you file your taxes or apply for the rebates when they are available -- expected in 2024 in California. For more information and help selecting a professional energy assessment company, visit energy.gov. Also, be sure check out the U.S. Department of Energy's Home Energy Score program and Home Performance with Energy Star programs to see if energy assessors associated with those programs are near you. Up to $14,000 in Rebates for Energy Efficiency Improvements While tax breaks help incentivize efficiency upgrades, the high up-front costs of these projects still put them out of reach for many families. Thankfully, two new rebate programs established under the Inflation Reduction Act aim to cut sticker prices for climate-friendly renovations and appliances, with a larger portion of the benefits going to low- to moderate-income families. These programs are the HOMES (Home Owner Managing Energy Savings) Rebate Program and the High-Efficiency Electric Home Rebate Act. California was allocated more than $582 million for these two programs, with the California Energy Commission expecting the rebates to go live in 2024. More information can be found on the California Department of Energy’s website, as well as in the NRDC’s Consumer Guide to the IRA. Please note that homeowners can only receive a rebate from either the HEEHRA program or the HOMES program—not both. However, homeowners are eligible to combine both a rebate from either of these two rebate programs and receive an energy efficiency tax credit at the same time. For more information, visit this resource from Rewiring America.



From IRS website:



Please do your part to leave this planet a better place for the next generations.





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