The Inflation Reduction Act: What’s In It For You?
You may have heard that the Inflation Reduction Act (IRA) was signed into law recently. While experts have varying opinions about whether it will reduce inflation in the near future, it contains, extends and modifies many climate and energy-related tax credits that may be of interest to individuals.
Nonbusiness energy property
Before the IRA was enacted, you were allowed a personal tax credit for certain nonbusiness energy property expenses. The credit applied only to property placed in service before January 1, 2022. The credit is now extended for energy-efficient property placed in service before January 1, 2033.
The new law also increases the credit for a tax year to an amount equal to 30% of:
- The amount paid or incurred by you for qualified energy efficiency improvements installed during the year, and
- The amount of the residential energy property expenditures paid or incurred during that year.
The credit is further increased for amounts spent for a home energy audit (up to $150).
In addition, the IRA repeals the lifetime credit limitation, and instead limits the credit to $1,200 per taxpayer, per year. There are also annual limits of $600 for credits with respect to residential energy property […]
