Energy and Vehicle Credits

Labor costs. Labor costs for installing items (2e) through (4), above, do not qualify for the credit.

Primary residence only. Items (2e) through (5), above, only apply to costs associated with your main home.

Home energy audits. A home energy audit includes a written report and inspection. Home energy audits must be conducted by a qualified home energy auditor.

Nonrefundable credit. Any excess credit cannot be applied to future tax years.

Residential Clean Energy Credit

If you invest in renewable energy for your home you may qualify for an annual residential clean energy tax credit.

Qualified expenses. Qualified expenses include the cost of new clean energy property including:

• Solar electric panels.
• Solar water heaters.
• Wind turbines.
• Geothermal heat pumps.
• Fuel cells.
• Battery storage technology (with a capacity of at least 3 kilowatt hours).

Credit amount. The credit equals 30% of the cost of new, qualified clean energy property installed for your home.

Limits for fuel cell property. The credit for fuel cell property is limited to $500 for each half kilowatt of capacity.

Nonrefundable credit. Any excess credit can be carried forward and applied to future tax years.

Clean Vehicle Credit

You may receive a credit if you buy a new qualified plug-in electric vehicle (EV) or fuel cell electric vehicle (FCV).

Income limits. In order to qualify for the credit, your modified adjusted gross income (AGI) may not exceed:

• $300,000 MFJ or a QSS,
• $225,000 HOH, or
• $150,000 Single or MFS.
  
  

You can use your modified AGI from the year you take delivery of the vehicle or the year before.

Qualified vehicles. To qualify, a vehicle must:

• Have a battery capacity of at least 7 kilowatt hours.
• Have a gross vehicle weight rating of less than 14,000 pounds.
• EVs must be made by a qualified manufacturer.
• Undergo final assembly in North America.
• Meet critical mineral and battery component requirements.
• The vehicle’s manufacturer suggested retail price (MSRP) cannot exceed:
  - $80,000 for vans, sport utility vehicles, and pickup trucks, or
  - $55,000 for any other vehicle.

The seller must report required information to you at the time of the sale.

Credit amount. If the vehicle meets only the critical minerals requirement or the battery components requirement, the credit is $3,750. If the vehicle meets both requirements, the credit is $7,500.

Nonrefundable credit. Any excess credit cannot be applied to future tax years.

Assignment of credit. Instead of taking a credit on your tax return, you may assign the credit to the dealer as a form of either a partial payment or down payment on the vehicle. If you do this but do not qualify for the credit based on your AGI, you will have to pay the credit back when you file your tax return for the year.

Lookup tool. To find out which vehicles qualify for the credit, and the amount of the credit the vehicle qualifies for, go to www.fueleconomy.gov/feg/tax2023.shtml.

Previously-Owned Clean Vehicle Credit

You may receive a credit if you buy a used qualified plug-in electric vehicle (EV) or fuel cell electric vehicle (FCV).

Income limits. In order to qualify for the credit, your modified adjusted gross income (AGI) may not exceed:

• $150,000 MFJ or a QSS,
• $112,500 HOH, or
• $75,000 Single or MFS.

You can use your modified AGI from the year you take de- livery of the vehicle or the year before.

Qualified vehicles. To qualify, a vehicle must:

• Have a sale price of $25,000 or less.
• Have a model year at least 2 years earlier than the calendar year when you buy it. For example, a         vehicle purchased in 2024 would need a model year of 2022 or older.
• Not have already been transferred after August 16, 2022, to a qualified buyer.
• Have a gross vehicle weight rating of less than 14,000 pounds.
• Be an eligible FCV or plug-in EV with a battery capacity of at least 7 kilowatt hours.
• Be for use primarily in the United States.
• The sale qualifies only if:
• You purchase the vehicle from a dealer, and
• For qualified used EVs, the dealer reports required information to you at the time of the sale and          to the IRS.

Credit amount. The amount of the credit is 30% of the sale price up to a maximum credit of $4,000.

Nonrefundable credit. Any excess credit cannot be applied to future tax years.

Assignment of credit. Instead of taking a credit on your tax return, you may assign the credit to the dealer as a form of either a partial payment or down payment on the vehicle. If you do this but do not qualify for the credit based on your AGI, you will have to pay the credit back when you file your tax return for the year.

Lookup tool. To find out which vehicles qualify for the credit, go to www.fueleconomy.gov/feg/taxused.shtml.

Nonrefundable Credit

A nonrefundable credit is limited to the amount you owe in income taxes. It will not decrease your self-employment taxes and cannot give you additional money back as a refund.

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There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following:

• Pension or IRA distributions. 
• Retirement.
• Significant change in income or deductions.
• Notice from IRS or other revenue department.
• Job change.
• Divorce or separation.
• Marriage.
• Self-Employment.
• Attainment of age 59½ or 73.
• Charitable contributions of property in excess of $5,000.
• Sale or purchase of a business.
• Sale or purchase of a residence or other real estate.