Inflation Reduction Act – The Greener Electron https://thegreenerelectron.com Helping You Save Money and the Planet with Green Energy Tips and Tricks Fri, 29 Sep 2023 22:02:15 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.5 https://i0.wp.com/thegreenerelectron.com/wp-content/uploads/2023/07/cropped-Logo-0-Transparent.png?fit=32%2C32&ssl=1 Inflation Reduction Act – The Greener Electron https://thegreenerelectron.com 32 32 230904070 How the 2023 Inflation Reduction Act EV Tax Credit Will Change for 2024 https://thegreenerelectron.com/2023/09/29/how-the-2023-inflation-reduction-act-ev-tax-credit-will-change-for-2024/?utm_source=rss&utm_medium=rss&utm_campaign=how-the-2023-inflation-reduction-act-ev-tax-credit-will-change-for-2024 https://thegreenerelectron.com/2023/09/29/how-the-2023-inflation-reduction-act-ev-tax-credit-will-change-for-2024/#respond Fri, 29 Sep 2023 22:02:13 +0000 https://thegreenerelectron.com/?p=139 Are you planning to buy an electric vehicle (EV) in the near future? Do you want to know how to save money and reduce your environmental impact with the 2023 Inflation Reduction Act EV tax credit? If so, you’ve come to the right place.

In this blog post, we’ll explain how the EV tax credit works, what changes are coming in 2024, and how to plan ahead to maximize your savings. You’ll learn about the different factors that affect your eligibility and amount of the credit, such as the type, price, battery capacity, and sourcing of your EV. You’ll also learn about the option to transfer the credit to a dealer at the point of sale, which will be available only for new EVs in 2024 and beyond.

Read on to find out how to take advantage of the 2023 Inflation Reduction Act EV tax credit and save money on your EV purchase.

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How the 2023 Inflation Reduction Act EV Tax Credit Will Change for 2024

If you’re thinking of buying an electric vehicle (EV) in the near future, you may be wondering how the 2023 Inflation Reduction Act EV tax credit will change for 2024. The EV tax credit is a federal incentive that can reduce your tax bill by up to $7,500 when you purchase a new or used qualifying EV. However, the rules and requirements for claiming the credit are not the same for every year.

In this post, we’ll explain how the 2023 Inflation Reduction Act EV tax credit works, what changes are coming in 2024, and how to plan ahead to maximize your savings.

How the 2023 Inflation Reduction Act EV Tax Credit Works

The 2023 Inflation Reduction Act EV tax credit is a nonrefundable credit that you can claim on your federal income tax return if you buy a new or used qualifying EV in 2023. The amount of the credit depends on several factors, such as:

  • The type of vehicle (plug-in hybrid, battery electric, or fuel cell)
  • The battery capacity of the vehicle
  • The manufacturer’s suggested retail price (MSRP) of the vehicle
  • The date of purchase and delivery of the vehicle
  • Your modified adjusted gross income (MAGI)
  • Whether the vehicle meets certain critical mineral and battery component requirements

The maximum credit amount for new EVs is $7,500, which is split into two parts: $3,750 for meeting the critical mineral requirement and $3,750 for meeting the battery component requirement. To meet these requirements, the vehicle must have at least 50% of its critical minerals and battery components sourced from North America. If the vehicle meets only one of these requirements, the maximum credit is $3,750. If the vehicle meets none of these requirements, it is not eligible for the credit.

The maximum credit amount for used EVs is $4,000, which is also split into two parts: $2,000 for meeting the critical mineral requirement and $2,000 for meeting the battery component requirement. To qualify as a used EV, the vehicle must have been previously owned by someone other than you or a related party, and have been driven less than 75,000 miles. The same sourcing rules apply as for new EVs.

The actual credit amount you can claim may be lower than the maximum amount, depending on your MAGI and the MSRP of the vehicle. The credit phases out for taxpayers whose MAGI exceeds certain thresholds:

  • $300,000 for married couples filing jointly
  • $225,000 for heads of households
  • $150,000 for all other filers

You can use your MAGI from either the year of purchase or the preceding year, whichever is lower. If your MAGI is below the threshold in either year, you can claim the full credit amount.

The credit also phases out for vehicles whose MSRP exceeds certain limits:

  • $80,000 for vans, SUVs, and pickup trucks
  • $55,000 for all other vehicles

If the MSRP exceeds the limit for that specific vehicle type, that vehicle is not eligible for the credit.

To claim the credit, you must buy the vehicle for your own use and not for resale. You must also use it primarily in the U.S. You can claim only one credit per vehicle and up to two credits per year. You cannot carry over any unused credit to future years.

What Changes Are Coming in 2024

The 2023 Inflation Reduction Act EV tax credit will change in several ways in 2024. Here are some of them:

  • The critical mineral and battery component requirements will become stricter. The vehicle must have at least 55% of its critical minerals and battery components sourced from North America in 2024, and at least 60% in 2025 and beyond.
  • The sourcing rules will also apply to labor costs. The vehicle must have at least 45% of its labor costs attributable to workers in North America in 2024, and at least 50% in 2025 and beyond.
  • The MSRP limits will be adjusted for inflation. The limits will be increased by a percentage equal to the consumer price index (CPI) for all urban consumers from August 2022 to August of each subsequent year.
  • The MAGI thresholds will be adjusted for inflation. The thresholds will be increased by a percentage equal to the CPI for all urban consumers from August 2022 to August of each subsequent year.
  • You will have an option to transfer the credit to a dealer. Instead of waiting until you file your tax return to claim the credit, you can choose to assign it to an eligible dealer at the point of sale. The dealer will then reduce the purchase price of the vehicle by the amount of the credit and claim it on their own tax return. This option will be available only for new EVs, not for used EVs.

How to Plan Ahead to Maximize Your Savings

If you’re planning to buy an EV in the near future, you may want to consider the following tips to maximize your savings from the 2023 Inflation Reduction Act EV tax credit:

  • Compare different models and brands of EVs. Not all EVs are eligible for the credit, and not all eligible EVs qualify for the same credit amount. You may want to compare different models and brands of EVs based on their features, prices, battery capacities, sourcing percentages, and credit amounts. You can use online tools like FuelEconomy.gov or Edmunds.com to find and compare eligible EVs.
  • Check your MAGI and plan your income. Your MAGI may affect your eligibility and amount of the credit. You may want to check your MAGI from the previous year and estimate your MAGI for the current year. If your MAGI is close to or above the threshold, you may want to plan your income accordingly. For example, you may want to defer some income to a later year or increase some deductions to lower your MAGI.
  • Time your purchase and delivery. The date of purchase and delivery of the vehicle may affect your eligibility and amount of the credit. You may want to time your purchase and delivery to take advantage of the best credit amount and sourcing rules. For example, you may want to buy and take delivery of a new EV before April 18, 2023, to avoid the critical mineral and battery component requirements. Or you may want to buy and take delivery of a new EV in 2024 or later, to take advantage of the option to transfer the credit to a dealer.
  • Keep records and receipts. To claim the credit, you will need to provide proof of purchase and ownership of the vehicle, as well as information about its features, price, battery capacity, sourcing percentages, and labor costs. You may want to keep records and receipts of these items, such as the sales contract, invoice, window sticker, certificate of origin, manufacturer’s statement, or other documents. You will also need to fill out Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, and attach it to your tax return.

Conclusion

The 2023 Inflation Reduction Act EV tax credit is a valuable incentive that can help you save money and reduce your environmental impact when you buy an EV. However, the rules and requirements for claiming the credit are not static and will change over time. By understanding how the credit works and what changes are coming in 2024, you can plan ahead and maximize your savings.

We hope you found this post helpful and informative. If you have any questions or comments, please feel free to leave them below.

And if you’re looking for more tips on how to optimize your EV lifestyle, check out our other blog posts on The Greener Electron. We cover topics like how to charge your EV faster, how to save money on your electricity bill, how to reduce your carbon footprint, and more.

Thanks for reading!

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Electric Cooking for Homes: Benefits, Costs, and Top Models https://thegreenerelectron.com/2023/08/11/electric-cooking-for-homes-benefits-costs-and-top-models/?utm_source=rss&utm_medium=rss&utm_campaign=electric-cooking-for-homes-benefits-costs-and-top-models https://thegreenerelectron.com/2023/08/11/electric-cooking-for-homes-benefits-costs-and-top-models/#respond Fri, 11 Aug 2023 20:15:01 +0000 https://thegreenerelectron.com/?p=113 Learn about the advantages of electric cooking for homes, how the Inflation Reduction Act can help you save money on electric appliances, and what are some of the best electric and induction cooktops on the market.

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Electric Cooking for Homes: Benefits, Costs, and Top Models
An electric oven in a modern kitchen

Electric cooking is a great way to prepare delicious meals while saving energy, money, and the environment. Electric cooking appliances, such as cooktops, ranges, and wall ovens, use electricity instead of gas to heat your food. This means they do not produce harmful emissions or pollutants that can affect your health and the climate. Electric cooking also offers more precise and consistent temperature control, faster heating and cooling, and easier cleaning than gas cooking.

But what are the differences between electric and induction cooking? And how can you afford to switch to electric cooking appliances with the help of the Inflation Reduction Act? And what are some of the top models of electric and induction cooktops that you can buy today? In this blog post, we will answer these questions and more.

Electric vs. Induction Cooking

Electric and induction cooking are both types of electric cooking, but they use different methods to heat your cookware and food. Electric cooktops use metal coils under a glass or ceramic surface to generate heat waves that transfer to your pots and pans through infrared energy. Induction cooktops use copper coils under a glass surface to create an electromagnetic field that heats your cookware directly.

Both electric and induction cooktops have their pros and cons. Here are some of the main ones:

  • Efficiency – Induction cooktops are more efficient than electric cooktops because they transfer heat directly to the cookware without losing much energy in the process. Induction cooktops can deliver up to 90% of the electromagnetic energy generated to the food in the pan, compared to as little as 38% of the energy generated in gas ranges1. Electric cooktops are still more efficient than gas cooktops, but they lose some energy as heat waves travel through the air and the surface.
  • Speed – Induction cooktops are faster than electric cooktops because they heat up and cool down almost instantly. Induction cooktops can boil water in half the time as electric or gas cooktops1. Electric cooktops take longer to heat up and cool down because they rely on thermal conduction rather than electromagnetic radiation.
  • Safety – Induction cooktops are safer than electric cooktops because they do not get hot themselves. The surface of an induction cooktop remains cool to the touch even when it is on. This reduces the risk of burns or fires. Electric cooktops get hot when they are in use and stay hot for a while after they are turned off. This can pose a hazard for children or pets who may touch them accidentally.
  • Cost – Electric cooktops are cheaper than induction cooktops because they use simpler technology and materials. The average cost of an electric cooktop ranges from $300 to $1,0002, while the average cost of an induction cooktop ranges from $700 to $2,5003. However, induction cooktops can save you money in the long run because they use less energy and require less maintenance than electric or gas cooktops.
  • Compatibility – Electric cooktops are compatible with any type of cookware that can withstand high temperatures. Induction cooktops are compatible only with magnetic cookware that contains iron or steel. You can check if your cookware is compatible with induction by using a magnet. If it sticks to the bottom of your pot or pan, it will work with induction. If not, you may need to buy new cookware or use an adapter plate.

The Inflation Reduction Act and Electric Cooking Appliances

The Inflation Reduction Act is a federal legislation that was passed in 2022 to address various issues related to climate change, infrastructure, social welfare, and economic recovery. The act includes many provisions that aim to promote clean energy and reduce greenhouse gas emissions in various sectors, including transportation, electricity, buildings, and industry.

One of the provisions of the act is to provide rebates for consumers who purchase new electric appliances, including electric cooking appliances such as cooktops, ranges, and wall ovens. The rebates are funded by $4.5 billion allocated to states for this purpose4. The states will decide how to distribute the rebates according to their own criteria and programs.

The amount of rebate you can receive depends on your income level and the type of appliance you buy. The act provides a rough framework for determining the rebate amount:

  • If your income is between 80% and 150% of your local area median income (AMI), you can receive a rebate of 50% of the price of your electric appliance, up to a maximum of $840.
  • If your income is below 80% of your AMI, you can receive a rebate of 100% of the price of your electric appliance, up to $840.
  • If your income is above 150% of your AMI, you do not qualify for a rebate.

You can calculate your AMI by using this tool5. You can also check if there are any additional rebates or incentives available in your state by using this database6.

The rebate program is expected to start in 2023, but you may want to start planning ahead and looking for the best electric cooking appliances for your home. Here are some of the top models that we recommend, based on our research and reviews.

Top Electric and Induction Cooktops

If you are looking for a new electric or induction cooktop, you may want to consider these models that offer excellent performance, features, and value.

  • GE Profile Smart Double Oven Electric Range – This is our top pick for the best overall electric range. It has a double oven, an air-fryer, and a smart appliance all-in-one. It has a large capacity of 6.6 cubic feet and a true convection oven that provides even and consistent heat. It also has a WiFi connectivity feature that allows you to control it remotely with your smartphone or voice assistant. It costs $2,699 at AJ Madison7.
  • Samsung Electric Convection+ Range – This is our top pick for the best convection electric range. It has a 6.3-cubic-foot oven with a convection+ technology that circulates hot air faster and more evenly. It also has a steam clean function that makes it easy to remove grease and food residue. It costs $899 at Home Depot8.
  • Café Slide-In Smart Induction Range – This is our top pick for the best splurge induction range. It has a sleek and stylish design with customizable knobs and handles. It has a 5.7-cubic-foot oven with a true European convection system that delivers precise and accurate heat. It also has a WiFi connectivity feature that allows you to control it remotely with your smartphone or voice assistant. It costs $3,599 at AJ Madison9.
  • Frigidaire Gallery Electric Range with Air Fry – This is our top pick for the best electric range with air fry. It has a 5.4-cubic-foot oven with an air fry function that lets you make crispy and healthy food without oil. It also has a quick preheat function that heats the oven in less than six minutes. It costs $1,099 at Home Depot4.
  • KitchenAid Slide-In Induction Range – This is our top pick for the best induction range. It has a 7.1-cubic-foot oven with an even-heat true convection system that ensures consistent heat throughout the oven. It also has a steam rack that adds moisture to the oven for enhanced cooking results. It costs $2,699 at Home Depot10.

Conclusion

Electric cooking is a smart choice for anyone who wants to save energy, money, and the environment while enjoying delicious meals. Electric cooking appliances offer more advantages than gas cooking appliances in terms of efficiency, speed, safety, and cleanliness.

If you are thinking about switching to electric cooking appliances, you may be able to benefit from the Inflation Reduction Act’s rebate program that will start in 2023. The program will provide rebates for consumers who buy new electric appliances based on their income level and appliance type.

If you are looking for the best electric or induction cooktops for your home, you may want to check out some of the top models that we recommended above. They offer excellent performance, features, and value for different needs and preferences.

We hope this blog post has given you some useful information and tips on electric cooking for homes. If you have any questions or comments, please feel free to leave them below or contact us at The Greener Electron. Thank you for reading our blog! 🌱

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The Inflation Reduction Act and Its Impact on the U.S., Businesses, and Homeowners https://thegreenerelectron.com/2023/07/10/the-inflation-reduction-act-and-its-impact-on-the-u-s-businesses-and-homeowners/?utm_source=rss&utm_medium=rss&utm_campaign=the-inflation-reduction-act-and-its-impact-on-the-u-s-businesses-and-homeowners https://thegreenerelectron.com/2023/07/10/the-inflation-reduction-act-and-its-impact-on-the-u-s-businesses-and-homeowners/#respond Mon, 10 Jul 2023 23:49:24 +0000 https://thegreenerelectron.com/?p=64 The Inflation Reduction Act of 2022, a landmark law that aims to curb inflation and invest in clean energy, and how it affects the U.S., businesses, and homeowners.

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The Inflation Reduction Act and Its Impact on the U.S., Businesses, and Homeowners
Great Seal of the United States

The Inflation Reduction Act of 2022 (IRA) is a landmark United States federal law which aims to curb inflation by possibly reducing the federal government budget deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy¹. The bill makes the largest investment in combating climate change in U.S. history, lowers the cost of prescription drugs and raises taxes on corporations. It also lowers health care costs and energy costs for consumers and businesses². In this blog post, we will discuss the main provisions of the IRA and how it impacts the U.S., businesses, and homeowners.

Main Provisions of the IRA

The IRA covers a wide range of topics and programs, but some of the main provisions are:

  • Clean energy tax credits – The IRA provides $370 billion in tax credits for various clean energy technologies and projects, such as solar, wind, geothermal, hydrogen, carbon capture, electric vehicles, energy efficiency, and green buildings. The credits are designed to incentivize private investment in clean energy and create jobs in the sector³.
  • Prescription drug pricing reform – The IRA allows Medicare to negotiate lower prices for certain prescription drugs with pharmaceutical companies, and extends those lower prices to private insurers and consumers. The IRA also caps out-of-pocket drug costs for Medicare beneficiaries at $2,000 per year⁴.
  • Health care affordability – The IRA expands the Affordable Care Act (ACA) subsidies for health insurance premiums and lowers the eligibility threshold for Medicaid expansion. The IRA also provides funding for home- and community-based services for seniors and people with disabilities.
  • Corporate tax increase – The IRA raises the corporate income tax rate from 21% to 26.5% for companies with more than $5 million in annual income. The IRA also imposes a 15% minimum tax on corporations with more than $1 billion in annual income that report little or no taxable income. The IRA also closes various loopholes and deductions that allow corporations to avoid paying taxes.

Impact on the U.S.

The IRA is expected to have a significant impact on the U.S. economy, environment, and society. Some of the expected impacts are:

  • Reducing inflation – The IRA is projected to reduce inflation by 0.3 percentage points in 2023 and 0.2 percentage points in 2024, according to the Congressional Budget Office (CBO). The CBO estimates that the IRA will reduce the federal deficit by $160 billion over 10 years by raising revenues and cutting spending.
  • Combating climate change – The IRA is estimated to reduce U.S. greenhouse gas emissions by 50% by 2030 compared to 2005 levels, according to an analysis by Princeton University. The IRA will also help the U.S. meet its commitments under the Paris Agreement and lead the global effort to fight climate change.
  • Creating jobs – The IRA is expected to create millions of jobs in various sectors, especially in clean energy, health care, education, and child care. According to an analysis by Moody’s Analytics, the IRA will create 4 million jobs by 2030 and increase real GDP by 1.7%.

Impact on Businesses

The IRA will affect businesses in different ways depending on their size, industry, and location. Some of the possible impacts are:

  • Higher taxes for large corporations – The IRA will increase the tax burden for large corporations that make more than $5 million or $1 billion in annual income. These corporations will face higher corporate income tax rates, minimum taxes, and limitations on deductions and credits. The IRA will also impose new taxes on foreign earnings of U.S.-based multinational corporations.
  • Lower costs for small businesses – The IRA will lower costs for small businesses that provide health insurance to their employees or purchase clean energy equipment or vehicles. The IRA will expand the ACA subsidies for small businesses that offer health insurance plans through the Small Business Health Options Program (SHOP). The IRA will also provide tax credits for small businesses that invest in solar panels, wind turbines, electric vehicles, or energy efficiency improvements.
  • More opportunities for green businesses – The IRA will create more opportunities for businesses that produce or use clean energy technologies or products. The IRA will provide tax credits, grants, loans, and contracts for businesses that develop or deploy renewable energy, carbon capture, hydrogen, electric vehicles, green buildings, or other green solutions. The IRA will also increase the demand for green products and services from consumers and government agencies.

Impact on Homeowners

The IRA will also affect homeowners in various ways, such as:

  • Lower energy costs – The IRA will lower energy costs for homeowners by providing tax credits for installing solar panels, wind turbines, geothermal heat pumps, or energy efficiency improvements in their homes. The IRA will also provide rebates for purchasing electric vehicles or energy-efficient appliances. The IRA will also increase the supply and reliability of renewable energy sources, which can lower electricity prices.
  • Lower health care costs – The IRA will lower health care costs for homeowners by expanding the ACA subsidies for health insurance premiums and capping out-of-pocket drug costs for Medicare beneficiaries. The IRA will also lower prescription drug prices for all consumers by allowing Medicare to negotiate with pharmaceutical companies. The IRA will also provide funding for home- and community-based services for seniors and people with disabilities.
  • More resilient homes – The IRA will help homeowners make their homes more resilient to extreme weather events and natural disasters caused by climate change. The IRA will provide grants and loans for homeowners to upgrade their homes with storm-resistant windows, doors, roofs, or foundations. The IRA will also provide funding for flood insurance and disaster relief programs.

We hope this blog post has given you an overview of the Inflation Reduction Act of 2022 and how it impacts the U.S., businesses, and homeowners. If you have any questions or comments, please feel free to leave them below. Thank you for reading The Greener Electron! 🌱

¹: Inflation Reduction Act – Wikipedia
²: FACT SHEET: The Inflation Reduction Act Supports Workers and Families
³: Inflation Reduction Act Guidebook | Clean Energy
⁴: Inflation Reduction Act of 2022 | Internal Revenue Service
: Inflation Reduction Act: Health Care Provisions
: Inflation Reduction Act: Corporate Tax Provisions
: CBO Estimate of the Inflation Reduction Act of 2022
: Princeton Study on the Climate Impact of the Inflation Reduction Act
: Moody’s Analysis on the Economic Impact of the Inflation Reduction Act
: Inflation Reduction Act: Corporate Tax Provisions
: Inflation Reduction Act: Small Business Provisions
: Inflation Reduction Act Guidebook | Clean Energy
: Inflation Reduction Act: Energy Cost Savings
: Inflation Reduction Act: Health Care Provisions
: Inflation Reduction Act: Resilience Provisions

Source:
(1) Inflation Reduction Act – Wikipedia. https://en.wikipedia.org/wiki/Inflation_Reduction_Act.
(2) Inflation Reduction Act of 2022 | Internal Revenue Service. https://www.irs.gov/inflation-reduction-act-of-2022.
(3) Inflation Reduction Act Guidebook | Clean Energy – The White House. https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/.
(4) FACT SHEET: The Inflation Reduction Act Supports Workers and. https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/19/fact-sheet-the-inflation-reduction-act-supports-workers-and-families/.

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