The Inflation Reduction Act of 2022 modifies and extends tax credits available to individual homeowners. It does this through two ways which are listed below.

Energy Efficient Home Improvement Credit

This nonrefundable tax credit is available to individuals for the installation of:

• qualified energy efficiency improvements (building envelope components); and
• qualified residential energy property expenditures (furnaces and certain fans, water heaters, certain heat pumps, and for tax years beginning before 2021, biomass stoves).

The 2022 Inflation Act also modifies the credit by:

• increasing the credit to 30% of the cost of qualified energy efficiency improvements
• replacing the lifetime credit cap with annual limits depending on the type of property;
• expanding the credit to cover the costs of home energy audits;
• expanding the definition of “qualified energy property” to include many more home energy functions such as electric or natural gas pump water heaters, central air conditioners, and more.

Residential Clean Energy Credit

This credit may be claimed for qualified property located in the United States and used as a residence by the taxpayer. Qualified residential clean energy property includes:

• solar electric property, solar water heating property, fuel cell property
• small wind energy property, geothermal heat pump property, and for expenditures incurred after 2020, biomass fuel property.

Please call our office at (402) 932-8815 and we can discuss how you may be able to take advantage of these credits or any other tax relief under the 2022 Inflation Act.

Sincerely,

W. E. Stevens PC