Last summer, the Inflation Reduction Act made major changes to energy and vehicle credits. Many of the credits are related to significant investments made by taxpayers, and clients are going to want to be sure their expenditures qualify if they are planning on using energy and vehicle tax credits to help defray the costs.
Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.
Q: Where do I find information to check on whether a vehicle is eligible for the new clean vehicle credit?
A: The website fueleconomy.gov is a helpful starting point: https://fueleconomy.gov/feg/tax2023.shtml
Q: Is there a lifetime limit on the energy efficient home improvement credit?
A: No, beginning in 2023 there is no lifetime limit on this credit or the residential energy efficient property (REEP) credits.
Q: When the instructor says the energy efficient credit has no lifetime limit, does that mean the taxpayer can take the credit at any time or only in the year money is spent on qualified improvements?
A: Taxpayers can claim the maximum credit allowed every year they make eligible improvements, but they must have the improvements installed before claiming the credit.
Q: Can you provide examples of items that would be eligible for the REEP credit?
A: Yes. Solar, fuel cell, wind and geothermal property are some examples of REEP.
To learn more on analyzing energy credits for homes and vehicles, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore.
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.