Residential energy credits have no income limitation only the electric vehicle credits are tied to income levels. I believe the credit is only available to home owner. Before the Inflation Reduction Act, if you purchased residential energy efficient property like solar panels and solar water heaters for your home, the tax credit was 26% of your purchase. Under the new law the credit increased to 30% if you purchase the energy efficient equipment January 1, 2022 through December 31, 2032.
These are the changes related to Electric Vehicle Credits:
- The manufacturer limitation is eliminated for cars sold after December 31, 2022
- Requires final assembly in North America (Effective immediately on August 17, 2022, unless you have entered into a binding contract to purchase a new electric vehicle before August 16, 2022)
- Manufacturer must be a qualified manufacturer
- Manufacturer’s suggested retail price for vans, sport utility vehicles, and pick ups is limited to $80,000 and other cars are limited to $50,000
- For new cars, modified adjusted gross income cannot exceed $300,000 married filing jointly, $225,000 head of household, $150,000 single
- For used cars, modified adjusted gross income cannot exceed $150,000 married filing jointly, $112,500 head of household, $75,000 single
Most of the changes are effective with electric vehicles purchased starting January 1, 2023. The only change in the law that is effective immediately starting on August 17, 2022 is that new electric vehicles must receive final assembly in North America. People who entered a binding contract to purchase a new electric vehicle before the Inflation Reduction Act passed can follow the previous rules in place.
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