Dear Friend,
One year ago, President Biden signed the Inflation Reduction Act into law, marking the single largest investment to combat climate change in our nation's history. This landmark bill is projected to cut greenhouse gas emissions by 40 percent in 2030 and save American families an average of $1,000 per year in energy costs. It’s also creating a major economic boon, sparking $86 billion in private sector investments with 210 major clean energy and vehicle projects underway and at least 74,000 new jobs available.
In fact, many Marylanders are already eligible for tax credits that make it easier to make cost-saving upgrades to their homes like solar panels, energy-efficient heat pumps, new windows and doors. It also provides tax credits for purchasing a new or used electric vehicle and EV chargers.
Learn how you can take advantage of these new clean energy tax credits below:
Residential Clean Energy Tax Credit:
This tax credit provides Maryland households with 30 percent toward total annual expenses related to clean energy improvements. Those who upgrade their electrical panels in conjunction with rooftop solar are also eligible for an additional 30 percent tax credit for those expenses. These credits are based on total improvement expenses in the year of installation and have no annual or maximum lifetime limit.
This 30 percent credit applies to purchase and installation costs for:
- Solar panels;
- Solar water heaters;
- Fuel cell property expenditures;
- Small wind turbines;
- Geothermal heat pumps; and
- Battery storage systems.
Energy Efficient Home Improvement Tax Credit
The Inflation Reduction Act significantly expands and extends the tax credit now known as the Energy Efficient Home Improvement Credit, offering 30 percent toward costs up to $3,200 each year.
Homeowners can claim a credit of up to $2,000 for heat pumps, heat pump water heaters or biomass stoves. The credit can also be applied toward installation and labor costs.
Homeowners can also claim credits up to $1,200 for weatherization projects and other energy-efficient improvements including up to:
- $150 for a home energy audit;
- $250 for a new exterior door ($500 total for all exterior doors);
- $600 for new exterior windows and skylights;
- $1,200 for insulation; and
- $600 for an upgraded electrical panel.
New Electric Vehicle Tax Credit
You may qualify for a credit up to $7,500 if you buy a new, qualified plug-in electric vehicle or fuel cell electric vehicle. Buyers must have an individual modified adjusted gross income less than $150,000 or $300,000 for joint filers and purchase a qualifying vehicle.
For a list of eligible EVs purchased and delivered in 2022, please visit this website.
For a list of eligible EVs purchased and delivered in 2023 or later, please visit this website.
For more information on the qualification requirements and how to apply, please visit this IRS website.
Used Electric Vehicle Tax Credit
If you buy a qualified used electric vehicle or fuel cell vehicle from a licensed dealer for $25,000 or less, you may be eligible for a tax credit equal to 30 percent of the sale price up to a maximum of $4,000. To qualify for this tax credit, buyers must have an individual modified adjusted gross income less than $75,000 or $150,000 for joint filers.
You can find a list of qualified vehicles here. Click here to learn more about qualifications and how to apply.
Electric Vehicle Charger Tax Credit
The federal tax credit for electric vehicle chargers originally expired at the end of 2021. However, the Inflation Reduction extends the EV charger tax incentive for ten years — through December 31, 2032. If you install a home EV charging station, the tax credit is 30 percent of the cost of hardware and installation, up to $1,000.
Businesses who install charging stations are eligible for more savings. Click here to learn more about this credit and how to apply.
I strongly urge you and your family to take advantage of these opportunities and stay updated with the latest guidance here. I was proud to play a role in passing this critical legislation and am pleased to share information that will help Marylanders save money while moving us toward our nation’s climate goals.
Sincerely,
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| C. A. Dutch Ruppersberger |
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