ENERGY-CONSCIOUS PURCHASES CREDIT
For 2022, qualifying property can be found here. The credit is 10% of the costs for principal residence only, up to a $500 lifetime credit. If you did not previously deduct this full $500 on any year's Form 5695, provide a copy of the bills you incurred for these purchases.
For 2023, even if you took the $500 lifetime credit through 12/31/22, a $1,200 annual credit is allowed for 30% of the qualified energy efficient improvements installed during the year but for both your principal residence and any other residences (not investment properties though). An additional credit amount of $150 is available for a home energy audit. After 2024, identification numbers will be required with respect to specified property items place in service.
For electric vehicles, for 2022, provide us with a copy of the invoice for the purchase of any new vehicle to determine the proper credit for your federal, or possibly state too, tax return. A maximum nonrefundable credit of $7,500 is available to buyers of certain new electric vehicles. Vehicles sold after 8/16/22 only qualify for the credit if their final assembly occurs in North America, with a transition rule for contracts before 8/16 and possession afterwards. Click here to enter the VIN number and model year to see if it qualifies.
After 2022, qualifying vehicles must have a minimum battery capacity of seven kilowatt hours (up from a four-hour minimum). This credit will then apply to previously owned vehicles as well as new vehicles. The credit will no longer be allowed:
- For vehicles with (MSRP) over $55,000 ($80,000 for vans, sport utility vehicles, and pickups); and
- If the taxpayer’s Modified Adjusted Gross Income (MAGI) (or, if lower, the MAGI for the preceding year) exceeds $300,000 for taxpayers filing jointly, $225,000 for head of household, or $150,000 for other taxpayers.
For previously owned vehicles, the credit is 30% of the sales price up to $4,000 and only for taxpayers with MAGI under $150,000 if filing jointly, $112,500 for head of household, and $75,000 for single. To qualify, a used clean vehicle's model year must be at least two years earlier than the calendar year in which the taxpayer acquires it and purchased from a dealer for less than $25,000.
