The Inflation Reduction Act (IRA) of August 2022 offers several opportunities to significantly reduce heating and other utility bills in addition to offering generous tax breaks. Below is a recap.
Clean vehicle tax credits
Refundable tax credit of $7500 for purchase of new electric vehicles; $4000 tax credit for purchase of used EVs.
Residential energy tax credits
Extends credit through 2034 for residential solar, wind, geothermal, biomass, fuel cell and battery storage technology. 30% credit through 2032; 26% in 2033 and 22% in 2034
Heat pumps- $8000 max credit; electric heat pump water heater, $1750 rebate; electric induction cooktop, $840 credit; electrical improvements and home insulation, $9100 max tax credit.
Medical provisions
Medicare recipients’ annual out-of-pocket expenses for prescription drugs will be capped at $2,000 starting in 2025. Affordable Care Act subsidies will be extended from the end of 2022 through 2025