On August 7, 2022, the Senate passed the Inflation Reduction Act of 2022 (IRA). The extensive bill, among other things, affects renewable tax credits and establishes new clean energy and efficiency initiatives.
The IRA extended several renewable energy tax credits through the end of 2024. The extended credits include the energy production tax credit for solar, wind, geothermal, biomass, and hydropower and the investment tax credit for solar energy property.
The Advanced Energy Project Credit, which provides a credit for qualified investments in manufacturing facilities that produce clean energy equipment, was also extended and increased. The IRA also allows eligible taxpayers to transfer all or a portion of certain eligible energy tax credits to other unrelated taxpayers in exchange for cash.
Also, among the clean energy and efficiency initiatives, the IRA includes credits for clean energy vehicles, clean fuel production, and alternative fuels. There is also a credit for purchasing used, clean vehicles that are at least two years old and are purchased before December 31, 2032. For both the new and used clean vehicle credits, there are limitations based on the vehicle sale price and the taxpayer's income.
For more information to see how these new rules can help your business or personal tax situation, please contact the professionals at Saggar & Rosenberg.
For help interpreting these changes, contact the tax professionals at Saggar & Rosenberg