Energy Credits - New for Tax Year 2023

A word of caution:  All energy credits are non-refundable.  Energy credits offset tax liability.  The benefit of an energy credit is limited by your federal tax liability.
Good News!  The energy efficient home improvement credit increased to up to 30% of the cost of certain qualified energy efficient improvements, a maximum of $2,000 per year for heat pumps, biomass stoves, biomass boilers.
Even better news!  Prior to 2023, a lifetime limit on energy credits of $500 was enacted.  The Inflation Reduction Act eliminated the lifetime dollar limit.  
Solar Energy:  The solar energy credit increased to 30% if you purchase residential energy efficient property.  Examples of qualifying property: solar panels, solar water heaters.  Solar energy credits are greater than all other energy efficient home improvement credits.
EV Electric Vehicle Credits:  A word of caution, this is a non-refundable credit.  The credit can only offset tax liability.   The tax credit for New EV vehicles assembled in North America is up to $7,500.  Again, this credit reduces your tax liability dollar-for-dollar and is limited based on your tax liability.
USED EV TAX CREDIT:  For the first time, in tax year 2023, the EV tax credit also applies to used vehicles. For used EV vehicles, the tax credit is the lesser of $4,000 or 30% of the sales price.  Applicable to used vehicles assembled in North America, limited to your tax liability.
BEWARE OF SCAMS!  From big box stores to the local roofer, clients are sold items with claims that the client will get all of their money back when they file their taxes.  This is absolutely not true!  Always ask before you buy.  
Myra B. Carlisle, CPA
Myra Carlisle & Company PC
2107 Martin St S Ste 100
Pell City, Alabama 35128
205-884-4829 (Text or Voice)
This written information cannot be used for the purposes of avoiding penalties that may be imposed by any federal/state/local tax authority.

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