Clean Energy Tax Incentives for Individuals

Clean Energy Tax Incentives for Individuals

The Inflation Reduction Act of 2022 (“IRA”) makes several clean energy tax credits available to individuals.

IRS.gov/CleanEnergy

Home Energy – IRS.gov/HomeEnergy

Vehicles - IRS.gov/CleanVehiclesv

Tax Provision

Description

Credit for New Clean

Vehicles

(§ 30D)

For buyers of new clean vehicles that meet certain requirements, as well as buyer income and manufacturer

suggested retail price limits. Learn more and see eligible vehicles at Fuel Economy.gov

Credit Amount: Up to $7,500 for qualifying vehicles, which can be applied to the purchase price of the vehicle starting

January 1, 2024. 1

Credit for Previously

Owned Clean Vehicles

(§25E)

For buyers of certain previously-owned clean vehicles sold in the first transfer after 12/31/22 for $25,000 or less.

Subject to buyer income limits. Vehicles must be at least 2 model years old, be purchased from a registered dealer,

and buyers must not have been allowed a 25E credit in the 3-year period prior to the sale of the qualifying vehicle.

Learn more and see eligible vehicles at Fuel Economy.gov

Credit Amount: The lesser of $4,000 or 30% of sale price, which can be applied to the purchase price of the vehicle

starting January 1, 2024.1

Alternative Fuel Vehicle

Refueling Property Credit

(§ 30C)

Includes Electric Vehicle

Charging Equipment

For alternative fuel vehicle refueling and charging property, including home electric vehicle charging stations,

located in low-income and non-urban areas. Qualified fuels include electricity, ethanol, natural gas, hydrogen, and

biodiesel.

Credit Amount: 30% of the cost of hardware and installation up to $1,000 for individuals; for businesses, 6% of basis

and can increase to 30% if PWA is met.2

Energy Efficient Home

Improvement Credit

(§ 25C)

See page 2 for more details.

Provides a tax credit for energy-efficiency improvements of residential homes

Credit Amount: 30% of cost, with limits for each type of improvement and total per year. To qualify, home

improvements must meet energy efficiency standards. They must be new systems and materials. Eligible expenses

include efficient heating and cooling equipment, windows, doors, heat pumps, insulation and air sealing materials.

See page 2 for more information and annual limits.

Residential Clean Energy

Installation Credit

(§25D)

Provides a tax credit for the purchase of residential clean energy equipment, including battery storage with

capacity of at least 3 kWh. These expenses may qualify if they meet certain energy efficiency requirements:

• Solar, wind, and geothermal power generation

• Solar water heaters

• Fuel cells

• Battery storage

Credit Amount: 30% of cost of equipment through 2032; 26% in 2033; 22% in 2034.

Notes:

The information in this document may be subject to change as guidance is issued or finalized. For all IRA clean energy tax credits, please see

IRS.gov/CleanEnergy for further details and eligibility requirements.

1

Starting January 1, 2024, the amount of a new clean vehicle or previously owned clean vehicle tax credit can be transferred to a dealer for an

equivalent reduction in the eligible vehicle’s sales price, deemed down payment, or cash.

2

Credit is multiplied by 5 (from 6% to 30%) for projects that meet prevailing wages and apprenticeship requirements or other requirements.

Equipment Type

Other Energy Efficiency Upgrades

Home Clean Electricity Power Generation and

Storage Products

Solar Panels

Fuel Cells

Wind Turbine

Battery Storage

Heating, Cooling, and Water Heating

Heat pumps (note: heat pumps also provide air conditioning)

Heat pump water heaters

Biomass stoves

Geothermal heat pumps

Solar (water heating)

Efficient air conditioners*

Efficient heating equipment*

Efficient water heating equipment*

Tax Credit Available For 2023-2032 Tax Years

30% of cost

30% of cost, up to $2,000 per year

30% of cost

30% of cost, up to $600

30% of cost, up to $600

Other Energy Efficiency Upgrades

(Electric panel or circuit upgrades for new electric equipment*

Building Envelope (including insulation materials and air sealing)*

Windows, including skylights*

Exterior doors*

Home Energy Audits*

30% of cost, up to $600

30% of cost

30% of cost, up to $600

30% of cost, up to $500 for doors (up to $250 each)

30% of cost, up to $150

Electric Vehicle Charging Equipment

Home Electric Vehicle Charger

30% of cost, up to $1,000

Notes:

* Subject to the Energy Efficient Home Improvement credit’s total annual credit limit of $1,200. There is a separate annual $2,000 limit for heat pumps.

Credit capped at $600 for “energy property,” e.g. efficient heating and cooling equipment; $600 for windows; $250 per door, $500 total for doors; $2,000

for heat pumps; $1,200 for qualified energy efficiency improvements to the building envelope, including insulation and air sealing. $150 credit for home

energy audits.

Publication 5886-A (Rev. 1-2024) Catalog Number 94474Y Department of the Treasury Internal Revenue Service www.irs.gov