1. Clean Vehicle Credits: New, Used, and Commercial

The IRA has expanded the clean vehicle credit, now covering not just new plug-in electric vehicles but also fuel cell vehicles. It’s even added a brand-new credit for purchasing previously owned or commercial clean vehicles. Whether you’re in the market for a new or used eco-friendly car, these credits can help reduce your tax bill. For more detailed answers, check out the IRS’s FAQs on these credits.

2. Home Energy Credits

Looking to make your home more energy efficient? The IRA has improved credits for energy-saving home upgrades, including those related to residential energy property. If you’re planning on making your home greener, there are specific expenditures that qualify for these credits, with certain limits. The IRS FAQs offer a thorough explanation of what qualifies and how to claim these credits.

3. Alternative Fuel Credits

The IRA also provides guidance on how to claim credits for alternative fuels used or sold during specific quarters in 2022. These credits can help offset excise taxes, making it financially easier to switch to cleaner fuel options. The IRS has outlined the rules and provided instructions on how to claim these credits in their notice.

4. Prevailing Wage and Apprenticeship Incentives

The IRA has also introduced clean energy tax incentives that offer higher credit or deduction amounts if prevailing wage and registered apprenticeship requirements are met. This means that if you’re involved in clean energy projects and meet these conditions, you could see additional financial benefits. The IRS has published final regulations and FAQs to help guide you through these requirements.

5. Elective Pay and Transferability Options

What if you don’t owe federal income tax but still want to benefit from clean energy tax credits? The IRA has introduced the elective pay option, allowing tax-exempt entities to receive a refund as if they had made a tax payment. If elective pay doesn’t apply to you, transferability might be the answer. This allows you to sell your tax credits to a third party in exchange for cash, making it possible to still benefit financially. The IRS provides an overview and specific guides on these options on their dedicated landing page.

For a deeper dive into these credits and deductions, visit the IRS’s resources on the Inflation Reduction Act. This is an excellent opportunity to explore how these changes can support your journey toward a cleaner and more sustainable future.