President Joe Biden signed the Inflation Reduction Act into law Aug. 16. The sweeping $739 billion reconciliation package provides clean energy tax incentives for home and business owners, among other provisions.
From electric vehicle rebates to commercial building rebates, here are three ways for small business owners to save both at home and at work.
1. Commercial savings:
The Section 179D deduction gives tax credits to business owners who make energy efficiency improvements to lighting, heating, cooling, ventilation or hot water systems in commercial buildings, including multifamily buildings that are four stories or taller.
179D increases the tax deduction from the maximum $1.88 to $5 per square foot.
2. Electric vehicle savings:
Consumers who purchase a new electric vehicle in the next 10 years, and make under $300,000 annually, are eligible for up to $7,500 in tax credit depending on the car's make, model and energy efficiency rating.
Consumers who purchased the vehicle used are eligible for up to $4,000 or 30 percent of the sale price, whichever is less.
3. Residential savings:
For the installation cost of solar panels or other equipment to harness renewable energy, the IRA extends and enhances an existing tax break.
Costs incurred from the beginning of 2022 to the end of 2032 qualify for a 30 percent tax credit that steps down to 26 percent in 2033 and 22 percent in 2034.
Additionally, homeowners who install efficiency retrofits can be refunded 50 percent of the cost of installation.
Homeowners who install energy efficient windows, skylights and exterior doors are also eligible for a 30 percent tax credit for the installation costs.