Getting the Most Out of the Inflation Reduction Act: Questions to Ask Your Tax Clients

1. Install efficient windows, doors, or insulation in your primary (or other) home?
   • For windows, a credit of 30% of the purchase price, up to $600/year.
   • For doors, a credit of 30% of the purchase price or $250/door with a maximum of $500/year.
   • For all improvements combined, max annual credit value of $1,200.
   • For more information visit the IRS Home Efficiency Page and use IRS Form 5695 to claim.
2. Purchase any energy efficient appliances?
   • Water heaters, heaters, ventilation, air conditioning, and stoves are eligible for 30% of the purchase price, up to $1,200 for all eligible equipment purchased in the tax year.
   • Heat pumps are eligible for 30% of the purchase price, up to $2,000.
   • For more information visit the IRS Home Efficiency Page and use IRS Form 5695 to claim.
3. Install an EV charger in your primary (or other) home?
   • 30% credit of the installed cost, up to $1,000.
   • See this IRS Fact Page for more information and use IRS Form 8911 to claim.
4. Buy a used electric vehicle?
   • Up to $4,000 for an EV 2 or more years old and costing less than $25,000.
   • Eligible to single filers earning up to $75,000/yr. or joint filers earning up to $150,000/yr.
   • See this IRS Fact Sheet for more information and use IRS Form 8936 to claim.
5. Buy a new electric vehicle?
   • Up to $7,500 for standard vehicles costing under $55,000 or SUVs costing under $80,000.
   • Eligible to single filers earning up to $150,000/yr. or joint filers earning up to $300,000/yr.
   • See this IRS Fact Sheet for more information and use IRS Form 8936 to claim
6. Install Solar, Wind, Geothermal, Fuel Cell Energy, or Battery Storage on your home?
   • Up to 30%, nonrefundable, can be carried forward.
   • Batteries must be greater than 3kwh.
   • See the Residential Clean Energy Credit information page and use IRS Form 5695 to claim.

For state and utility incentives that can provide additional savings on energy efficiency upgrades for New Jersey residents visit CEPFindAProgram.com.

5 Questions for Business Tax Clients

1. Increase the energy efficiency of your commercial building(s) by more than 25%?
   • Credit from 50 cents/square foot up to 5 dollars/square foot for qualifying facilities.
   • See the IRS Fact Page for more information on Section 179D and use IRS Form 7205 to claim.
2. Install an EV charger on your property?
   • Credit of up to 30% up to a max of $100,000 for chargers subject to a depreciation schedule.
   • See this IRS Fact Page for more information on Section 30C and use IRS Form 8911 to claim.
3. Buy an electric vehicle for commercial purposes?
   • Credit of up to 30% with a max of $7,500 for vehicles under 14,000lbs.
   • Credit of up to 30% with a max of $40,000 for all vehicles over 14,000lbs.
   • See this IRS Fact Sheet for more information and use IRS Form 8936 to claim.
4. Build any residential housing units?
   • Credit of up to $5,000 per qualifying energy efficient home or housing unit constructed.
   • See the IRS Instructions for more information on Section 45L and use IRS Form 8908 to claim.
5. Manufacture any of the following components?
   • Any solar energy component like a photovoltaic cell, photovoltaic module, or tracking mount.
   • Any wind energy component like a blade, nacelle, tower, or vessel.
   • An Inverter for solar or wind DC power.
   • A Battery component like an electrode mat, battery cell, or battery module.
   • Any critical materials like aluminum, graphite, lithium, nickel, or others.
   • See the IRS Guidance on the Sec. 45X Credit for more information and use IRS Form 7207 to claim.

To learn about state incentives programs such NJ Cool, NJ ZIP, NJ CELs, Garden State C-PACE, and others that may provide additional savings for your business visit NJEDA.gov/clean-energy.

This information is intended to assist accountants/firms in providing guidance to their clients and should not be considered direct tax advice.