Thousands of Americans could get direct payments worth over $10,000 – see if you’re eligible
10 September 2022
THOUSANDS of people across the country could receive payments of more than $10,000 for reducing their carbon footprint.
The Inflation Reduction Act includes tax credits and rebates for those who turn to cleaner energy sources.
There are several actions you can take to claim these funds.
The act provides credits for those who buy electric vehicles and energy-efficient appliances, install solar panels on their home and more, reports CNBC.
However, these incentives have different timelines for when payments will start going out.
Some consumers may have to wait until 2024 to reap the benefits.
Electric vehicle credit
The tax credits for buying electric vehicles apply to both new and used cars.
Although this law has been on the books for some time now, it was tweaked when the Inflation Reduction Act was signed.
Those who buy a new car will get up to $7,500 credit, and those who buy used cars will get up to $4,000.
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It's important to note the amount you'll get depends on things like household income and the sale price of the vehicle.
Purchases of used vehicles will qualify for the tax break starting in 2023.
Next year two new requirements will kick in:
- Requirements for sourcing of the car battery's critical minerals
- A share of battery components must be manufactured and assembled in North America
Buying in 2022 could get you the credit without worrying about these new rules.
If you wait to buy and end up not meeting the new criteria, you'll miss out on the credit altogether.
However, if you hold out until 2024 you'd get instant savings as the tax credit will become a discount on the price of the car.
Tax breaks for home upgrades
There are two tax credits available for homeowners.
The first is the nonbusiness energy property credit, which is a 30 percent tax credit, worth up to $1,200 a year.
This is for the installation of things like insulated windows and doors and energy-efficient skylights.
A slightly higher payout of $2,000 would go to those who install heat pumps and biomass stoves and boilers.
On the other hand, the residential clean energy credit provides a 30 percent tax credit for those who install solar panels and other equipment that allows them to use renewable energy.
Consumers may also be eligible for up to $14,000 via the high-efficiency electric home rebate program.
Households can get multiple payments such as:
- Up to $1,750 for a heat pump water heater
- $8,000 for a heat pump for space heating or cooling
- $840 for an electric stove or an electric heat pump clothes dryer
- $4,000 for an electric load service center upgrade
- $1,600 for insulation, air sealing and ventilation
- $2,500 for electric wiring.
Although the law doesn't set an exact timeline for these rebates, it is believed they'll be widely available by the middle of 2023.
Several states are also offering financial incentives for those who switch to a greener lifestyle.
If these don't apply to you, don't worry, a money expert shows you how you can lower your internet bill by $40 per month.