Inflation Reduction Act - Home Improvement Rebates & Tax Credits

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Calvert
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Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Calvert »

I researched this and put together a summary of (Home improvement) rebates and tax credits available thru the Inflation Reduction Act. I used this info to make a simple spread sheet personal plan. I hope to use this to make some upgrades and save some money over the next few years. I wanted to share the info as it might help others.

There is a forum discussion from a few months ago ... here. I found it a little caotic to actually use to make plans.

High Level

H.R.5376 - Inflation Reduction Act of 2022 provides for 2 (Home improvement) financial incentives for consumers. Rebates (up to a total of $14k available thru 9/2031), and tax credits (up to $3,200 annually from 2023 to 2032).

The full text of the law is here

Rebates
  1. Will be administered by the states and are not expected to be available until late 2023
  2. Are expected to be point of sale discounts
  3. You need to qualify by income. As an example, a MFJ couple making $125,000 qualifies for 50% discounts in my zip code.
  4. Each state can make its own income rules. AGI or Gross Income are 2 options. A number of "hints" point to AGI, but we cannot know until our state is ready (they make a proposal to the Feds for a grant for the money)
  5. A calculator is available here to determine if you qualify based on income. Qualifying for the 50% rebate can still get you the full $14k discount, you would just have to have $28k of upgrades over 9 or so years. The remaining $14k out of pocket can still be eligible for tax credits.
  6. These are often referred to as High-Efficiency Electric Home Rebate (HEEHR) program
Example rebate item caps are below. Total max is $14k. Even at 50% income qualification, you can still get the item/total max ... ie. $8K for HVAC and $14k total, not $4k and $7k.
  • $8000 for an electric heat pump HVAC system
  • $4000 for an electric panel upgrade
  • $2600 for electric wiring
  • $1750 for an electric heat pump water heater
  • $1600 for insulation
  • $840 for an electric stove
  • $840 for an electric heat pump clothes dryer
ACTUAL LAW -SEC. 50122. <> HIGH-EFFICIENCY ELECTRIC HOME REBATE PROGRAM.

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            (1) Funds to state energy offices and indian tribes.--In 
        addition to amounts otherwise available, there is appropriated 
        to the Secretary for fiscal year 2022, out of any money in the 
        Treasury not otherwise appropriated, to carry out a program--
                    (A) to award grants to State energy offices to 
                develop and implement a high-efficiency electric home 
                rebate program in accordance with subsection (c), 
                $4,275,000,000, to remain available through September 
                30, 2031; and
                    (B) to award grants to Indian Tribes to develop and 
                implement a high-efficiency electric home rebate program 
                in accordance with subsection (c), $225,000,000, to 
                remain available through September 30, 2031.
            (2) Allocation of funds.--
                    (A) State energy offices.--The Secretary shall 
                reserve funds made available under paragraph (1)(A) for 
                each State energy office--
                          (i) <>  in accordance 
                      with the allocation formula for the State Energy 
                      Program in effect on January 1, 2022; and
                          (ii) to be distributed to a State energy 
                      office if the application of the State energy 
                      office under subsection (b) is approved.
                    (B) Indian tribes.--The Secretary shall reserve 
                funds made available under paragraph (1)(B)--
                          (i) in a manner determined appropriate by the 
                      Secretary; and
                          (ii) to be distributed to an Indian Tribe if 
                      the application of the Indian Tribe under 
                      subsection (b) is approved.
                    (C) <>  Additional funds.--Not 
                earlier than 2 years after the date of enactment of this 
                Act, any money reserved under--
                          (i) subparagraph (A) but not distributed under 
                      clause (ii) of that subparagraph shall be 
                      redistributed to the State energy offices 
                      operating a high-efficiency electric home rebate 
                      program in proportion to the amount distributed to 
                      those State energy offices under that clause; and
                          (ii) subparagraph (B) but not distributed 
                      under clause (ii) of that subparagraph shall be 
                      redistributed to the Indian Tribes operating a 
                      high-efficiency electric home rebate program in 
                      proportion to the amount distributed to those 
                      Indian Tribes under that clause.
            (3) Administrative expenses.--Of the funds made available 
        under paragraph (1), the Secretary shall use not more than 3 
        percent for--
                    (A) administrative purposes; and
                    (B) providing technical assistance relating to 
                activities carried out under this section.

    (b) <>  Application.--A State energy office or Indian 
Tribe seeking a grant under the program shall submit to the Secretary an 
application that includes a plan to implement a high-efficiency electric 
home rebate program, including--
            (1) <>  a plan to verify the income 
        eligibility of eligible entities seeking a rebate for a 
        qualified electrification project;

[[Page 136 STAT. 2038]]

            (2) a plan to allow rebates for qualified electrification 
        projects at the point of sale in a manner that ensures that the 
        income eligibility of an eligible entity seeking a rebate may be 
        verified at the point of sale;
            (3) a plan to ensure that an eligible entity does not 
        receive a rebate for the same qualified electrification project 
        through both a high-efficiency electric home rebate program and 
        any other Federal grant or rebate program, pursuant to 
        subsection (c)(8); and
            (4) any additional information that the Secretary may 
        require.

    (c) High-efficiency Electric Home Rebate Program.--
            (1) <>  In general.--Under the program, the 
        Secretary shall award grants to State energy offices and Indian 
        Tribes to establish a high-efficiency electric home rebate 
        program under which rebates shall be provided to eligible 
        entities for qualified electrification projects.
            (2) Guidelines.--The Secretary shall prescribe guidelines 
        for high-efficiency electric home rebate programs, including 
        guidelines for providing point of sale rebates in a manner 
        consistent with the income eligibility requirements under this 
        section.
            (3) Amount of rebate.--
                    (A) Appliance upgrades.--The amount of a rebate 
                provided under a high-efficiency electric home rebate 
                program for the purchase of an appliance under a 
                qualified electrification project shall be--
                          (i) not more than $1,750 for a heat pump water 
                      heater;
                          (ii) not more than $8,000 for a heat pump for 
                      space heating or cooling; and
                          (iii) not more than $840 for--
                                    (I) an electric stove, cooktop, 
                                range, or oven; or
                                    (II) an electric heat pump clothes 
                                dryer.
                    (B) Nonappliance upgrades.--The amount of a rebate 
                provided under a high-efficiency electric home rebate 
                program for the purchase of a nonappliance upgrade under 
                a qualified electrification project shall be--
                          (i) not more than $4,000 for an electric load 
                      service center upgrade;
                          (ii) not more than $1,600 for insulation, air 
                      sealing, and ventilation; and
                          (iii) not more than $2,500 for electric 
                      wiring.
                    (C) Maximum rebate.--An eligible entity receiving 
                multiple rebates under this section may receive not more 
                than a total of $14,000 in rebates.
            (4) Limitations.--A rebate provided using funding under this 
        section shall not exceed--
                    (A) in the case of an eligible entity described in 
                subsection (d)(1)(A)--
                          (i) 50 percent of the cost of the qualified 
                      electrification project for a household the annual 
                      income of which is not less than 80 percent and 
                      not greater than 150 percent of the area median 
                      income; and
                          (ii) 100 percent of the cost of the qualified 
                      electrification project for a household the annual 
                      income

[[Page 136 STAT. 2039]]

                      of which is less than 80 percent of the area 
                      median income;
                    (B) in the case of an eligible entity described in 
                subsection (d)(1)(B)--
                          (i) 50 percent of the cost of the qualified 
                      electrification project for a multifamily building 
                      not less than 50 percent of the residents of which 
                      are households the annual income of which is not 
                      less than 80 percent and not greater than 150 
                      percent of the area median income; and
                          (ii) 100 percent of the cost of the qualified 
                      electrification project for a multifamily building 
                      not less than 50 percent of the residents of which 
                      are households the annual income of which is less 
                      than 80 percent of the area median income; or
                    (C) in the case of an eligible entity described in 
                subsection (d)(1)(C)--
                          (i) 50 percent of the cost of the qualified 
                      electrification project for a household--
                                    (I) on behalf of which the eligible 
                                entity is working; and
                                    (II) the annual income of which is 
                                not less than 80 percent and not greater 
                                than 150 percent of the area median 
                                income; and
                          (ii) 100 percent of the cost of the qualified 
                      electrification project for a household--
                                    (I) on behalf of which the eligible 
                                entity is working; and
                                    (II) the annual income of which is 
                                less than 80 percent of the area median 
                                income.
            (5) Amount for installation of upgrades.--
                    (A) In general.--In the case of an eligible entity 
                described in subsection (d)(1)(C) that receives a rebate 
                under the program and performs the installation of the 
                applicable qualified electrification project, a State 
                energy office or Indian Tribe shall provide to that 
                eligible entity, in addition to the rebate, an amount 
                that--
                          (i) does not exceed $500; and
                          (ii) <>  is commensurate 
                      with the scale of the upgrades installed as part 
                      of the qualified electrification project, as 
                      determined by the Secretary.
                    (B) Treatment.--An amount received under 
                subparagraph (A) by an eligible entity described in that 
                subparagraph shall not be subject to the requirement 
                under paragraph (6).
            (6) Requirement.--An eligible entity described in 
        subparagraph (C) of subsection (d)(1) shall discount the amount 
        of a rebate received for a qualified electrification project 
        from any amount charged by that eligible entity to the eligible 
        entity described in subparagraph (A) or (B) of that subsection 
        on behalf of which the qualified electrification project is 
        carried out.
            (7) Exemption.--Activities carried out by a State energy 
        office using a grant provided under the program shall not be 
        subject to the expenditure prohibitions and limitations 
        described in section 420.18 of title 10, Code of Federal 
        Regulations.

[[Page 136 STAT. 2040]]

            (8) Prohibition on combining rebates.--A rebate provided by 
        a State energy office or Indian Tribe under a high-efficiency 
        electric home rebate program may not be combined with any other 
        Federal grant or rebate, including a rebate provided under a 
        HOMES rebate program (as defined in section 50121(d)), for the 
        same qualified electrification project.
            (9) Administrative costs.--A State energy office or Indian 
        Tribe that receives a grant under the program shall use not more 
        than 20 percent of the grant amount for planning, 
        administration, or technical assistance relating to a high-
        efficiency electric home rebate program.

    (d) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means--
                    (A) a low- or moderate-income household;
                    (B) an individual or entity that owns a multifamily 
                building not less than 50 percent of the residents of 
                which are low- or moderate-income households; and
                    (C) <>  a governmental, 
                commercial, or nonprofit entity, as determined by the 
                Secretary, carrying out a qualified electrification 
                project on behalf of an entity described in subparagraph 
                (A) or (B).
            (2) High-efficiency electric home rebate program.--The term 
        ``high-efficiency electric home rebate program'' means a rebate 
        program carried out by a State energy office or Indian Tribe 
        pursuant to subsection (c) using a grant received under the 
        program.
            (3) Indian tribe.--The term ``Indian Tribe'' has the meaning 
        given the term in section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 5304).
            (4) Low- or moderate-income household.--The term ``low- or 
        moderate-income household'' means an individual or family the 
        total annual income of which is less than 150 percent of the 
        median income of the area in which the individual or family 
        resides, as reported by the Department of Housing and Urban 
        Development, including an individual or family that has 
        demonstrated eligibility for another Federal program with income 
        restrictions equal to or below 150 percent of area median 
        income.
            (5) Program.--The term ``program'' means the program carried 
        out by the Secretary under subsection (a)(1).
            (6) Qualified electrification project.--
                    (A) In general.--The term ``qualified 
                electrification project'' means a project that--
                          (i) includes the purchase and installation 
                      of--
                                    (I) an electric heat pump water 
                                heater;
                                    (II) an electric heat pump for space 
                                heating and cooling;
                                    (III) an electric stove, cooktop, 
                                range, or oven;
                                    (IV) an electric heat pump clothes 
                                dryer;
                                    (V) an electric load service center;
                                    (VI) insulation;
                                    (VII) air sealing and materials to 
                                improve ventilation; or
                                    (VIII) electric wiring;
                          (ii) with respect to any appliance described 
                      in clause (i), the purchase of which is carried 
                      out--
                                    (I) as part of new construction;

[[Page 136 STAT. 2041]]

                                    (II) to replace a nonelectric 
                                appliance; or
                                    (III) as a first-time purchase with 
                                respect to that appliance; and
                          (iii) is carried out at, or relating to, a 
                      single-family home or multifamily building, as 
                      applicable and defined by the Secretary.
                    (B) Exclusions.--The term ``qualified 
                electrification project'' does not include any project 
                with respect to which the appliance, system, equipment, 
                infrastructure, component, or other item described in 
                subclauses (I) through (VIII) of subparagraph (A)(i) is 
                not certified under the Energy Star program established 
                by section 324A of the Energy Policy and Conservation 
                Act (42 U.S.C. 6294a), if applicable.
Tax Credits
  1. Are available every year (from 2023 to 2032) for a max of $2,000 for HVAC heat pumps (and mini-splits) and $1,200 other items
  2. Are a 30% credit for each item. For example, if you install a $6,667 mini-split heat pump, you can get a $2,000 credit
  3. The $2,000 for heat pumps and $1,200 are separate credits. Thus, the maximum total yearly energy efficient home improvement credit amount may be up to $3,200
  4. Do not cover all items covered by rebates (wiring for example) but do cover some items for which there are no rebates (exterior doors for example)
  5. There is no income requirement
  6. The credits are "administered" by the IRS. They have some FAQs here and here.
  7. These credits are an extension of a prior law and are often referred to as 25C tax credits
  8. Some items have item specific caps that can then add up to the $1,200 per year total
Item Specific Caps
  • exterior doors (30% of costs up to $250 per door, up to a total of $500)
  • exterior windows and skylights (30% of costs up to $600)
  • insulation materials or systems and air sealing materials or systems (30% of costs)
  • electrical panel (30% of costs, including labor, up to $600 for each item) if in conjunction with another item like a heat pump
ACTUAL LAW -SEC. 13301. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS ENERGY PROPERTY CREDIT.

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SEC. 13301. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS 
                            ENERGY PROPERTY CREDIT.

    (a) Extension of Credit.--Section 25C(g)(2) is amended by striking 
``December 31, 2021'' and inserting ``December 31, 2032''.

[[Page 136 STAT. 1942]]

    (b) <>  Allowance of Credit.--Section 25C(a) is 
amended to read as follows:

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter for 
the taxable year an amount equal to 30 percent of the sum of--
            ``(1) the amount paid or incurred by the taxpayer for 
        qualified energy efficiency improvements installed during such 
        taxable year, and
            ``(2) the amount of the residential energy property 
        expenditures paid or incurred by the taxpayer during such 
        taxable year.''.

    (c) Application of Annual Limitation in Lieu of Lifetime 
Limitation.--Section 25C(b) is amended to read as follows:
    ``(b) Limitations.--
            ``(1) In general.--The credit allowed under this section 
        with respect to any taxpayer for any taxable year shall not 
        exceed $1,200.
            ``(2) Energy property.--The credit allowed under this 
        section by reason of subsection (a)(2) with respect to any 
        taxpayer for any taxable year shall not exceed, with respect to 
        any item of qualified energy property, $600.
            ``(3) Windows.--The credit allowed under this section by 
        reason of subsection (a)(1) with respect to any taxpayer for any 
        taxable year shall not exceed, in the aggregate with respect to 
        all exterior windows and skylights, $600.
            ``(4) Doors.--The credit allowed under this section by 
        reason of subsection (a)(1) with respect to any taxpayer for any 
        taxable year shall not exceed--
                    ``(A) $250 in the case of any exterior door, and
                    ``(B) $500 in the aggregate with respect to all 
                exterior doors.
            ``(5) Heat pump and heat pump water heaters; biomass stoves 
        and boilers.--Notwithstanding paragraphs (1) and (2), the credit 
        allowed under this section by reason of subsection (a)(2) with 
        respect to any taxpayer for any taxable year shall not, in the 
        aggregate, exceed $2,000 with respect to amounts paid or 
        incurred for property described in clauses (i) and (ii) of 
        subsection (d)(2)(A) and in subsection (d)(2)(B).''.

    (d) Modifications Related to Qualified Energy Efficiency 
Improvements.--
            (1) Standards for energy efficient building envelope 
        components.--Section 25C(c)(2) is amended by striking ``meets--
        '' and all that follows through the period at the end and 
        inserting the following: ``meets--
                    ``(A) in the case of an exterior window or skylight, 
                Energy Star most efficient certification requirements,
                    ``(B) in the case of an exterior door, applicable 
                Energy Star requirements, and
                    ``(C) <>  in the case of any 
                other component, the prescriptive criteria for such 
                component established by the most recent International 
                Energy Conservation Code standard in effect as of the 
                beginning of the calendar year which is 2 years prior to 
                the calendar year in which such component is placed in 
                service.''.
            (2) Roofs not treated as building envelope components.--
        Section 25C(c)(3) is amended by adding ``and'' at the

[[Page 136 STAT. 1943]]

        end of subparagraph (B), by striking ``, and'' at the end of 
        subparagraph (C) and inserting a period, and by striking 
        subparagraph (D).
            (3) Air sealing insulation added to definition of building 
        envelope component.--Section 25C(c)(3)(A) <>  
        is amended by inserting ``, including air sealing material or 
        system,'' after ``material or system''.

    (e) Modification of Residential Energy Property Expenditures.--
Section 25C(d) is amended to read as follows:
    ``(d) <>  Residential Energy Property 
Expenditures.--For purposes of this section--
            ``(1) In general.--The term `residential energy property 
        expenditures' means expenditures made by the taxpayer for 
        qualified energy property which is--
                    ``(A) installed on or in connection with a dwelling 
                unit located in the United States and used as a 
                residence by the taxpayer, and
                    ``(B) originally placed in service by the taxpayer.
        Such term includes expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property.
            ``(2) <>  Qualified energy 
        property.--The term `qualified energy property' means any of the 
        following:
                    ``(A) Any of the following which meet or exceed the 
                highest efficiency tier (not including any advanced 
                tier) established by the Consortium for Energy 
                Efficiency which is in effect as of the beginning of the 
                calendar year in which the property is placed in 
                service:
                          ``(i) An electric or natural gas heat pump 
                      water heater.
                          ``(ii) An electric or natural gas heat pump.
                          ``(iii) A central air conditioner.
                          ``(iv) A natural gas, propane, or oil water 
                      heater.
                          ``(v) A natural gas, propane, or oil furnace 
                      or hot water boiler.
                    ``(B) A biomass stove or boiler which--
                          ``(i) uses the burning of biomass fuel to heat 
                      a dwelling unit located in the United States and 
                      used as a residence by the taxpayer, or to heat 
                      water for use in such a dwelling unit, and
                          ``(ii) has a thermal efficiency rating of at 
                      least 75 percent (measured by the higher heating 
                      value of the fuel).
                    ``(C) Any oil furnace or hot water boiler which--
                          ``(i) is placed in service after December 31, 
                      2022, and before January 1, 2027, and--
                                    ``(I) meets or exceeds 2021 Energy 
                                Star efficiency criteria, and
                                    ``(II) is rated by the manufacturer 
                                for use with fuel blends at least 20 
                                percent of the volume of which consists 
                                of an eligible fuel, or
                          ``(ii) is placed in service after December 31, 
                      2026, and--
                                    ``(I) achieves an annual fuel 
                                utilization efficiency rate of not less 
                                than 90, and

[[Page 136 STAT. 1944]]

                                    ``(II) is rated by the manufacturer 
                                for use with fuel blends at least 50 
                                percent of the volume of which consists 
                                of an eligible fuel.
                    ``(D) Any improvement to, or replacement of, a 
                panelboard, sub-panelboard, branch circuits, or feeders 
                which--
                          ``(i) is installed in a manner consistent with 
                      the National Electric Code,
                          ``(ii) has a load capacity of not less than 
                      200 amps,
                          ``(iii) is installed in conjunction with--
                                    ``(I) any qualified energy 
                                efficiency improvements, or
                                    ``(II) any qualified energy property 
                                described in subparagraphs (A) through 
                                (C) for which a credit is allowed under 
                                this section for expenditures with 
                                respect to such property, and
                          ``(iv) enables the installation and use of any 
                      property described in subclause (I) or (II) of 
                      clause (iii).
            ``(3) Eligible fuel.--For purposes of paragraph (2), the 
        term `eligible fuel' means--
                    ``(A) biodiesel and renewable diesel (within the 
                meaning of section 40A), and
                    ``(B) second generation biofuel (within the meaning 
                of section 40).''.

    (f) Home Energy Audits.--
            (1) In general.--Section 25C(a), as amended by subsection 
        (b), is amended <>  by striking ``and'' at 
        the end of paragraph (1), by striking the period at the end of 
        paragraph (2) and inserting ``, and'', and by adding at the end 
        the following new paragraph:
            ``(3) the amount paid or incurred by the taxpayer during the 
        taxable year for home energy audits.''.
            (2) Limitation.--Section 25C(b), as amended by subsection 
        (c), is amended adding at the end the following new paragraph:
            ``(6) Home energy audits.--
                    ``(A) Dollar limitation.--The amount of the credit 
                allowed under this section by reason of subsection 
                (a)(3) shall not exceed $150.
                    ``(B) Substantiation requirement.--No credit shall 
                be allowed under this section by reason of subsection 
                (a)(3) unless the taxpayer includes with the taxpayer's 
                return of tax such information or documentation as the 
                Secretary may require.''.
            (3) Home energy audits.--
                    (A) In general.--Section 25C is amended by 
                redesignating subsections (e), (f), and (g), as 
                subsections (f), (g), and (h), respectively, and by 
                inserting after subsection (d) the following new 
                subsection:

    ``(e) <>  Home Energy Audits.--For purposes of 
this section, the term `home energy audit' means an inspection and 
written report with respect to a dwelling unit located in the United 
States and owned or used by the taxpayer as the taxpayer's principal 
residence (within the meaning of section 121) which--
            ``(1) <>  identifies the most 
        significant and cost-effective energy efficiency improvements 
        with respect to such dwelling unit, including an estimate of the 
        energy and cost savings with respect to each such improvement, 
        and

[[Page 136 STAT. 1945]]

            
        ``(2) <> 
         is conducted and prepared by a home energy auditor that meets 
        the certification or other requirements specified by the 
        Secretary in regulations or other guidance (as prescribed by the 
        Secretary not later than 365 days after the date of the 
        enactment of this subsection).''.
                    (B) <>  Conforming amendment.--
                Section 1016(a)(33) is amended by striking ``section 
                25C(f)'' and inserting ``section 25C(g)''.
            (4) Lack of substantiation treated as mathematical or 
        clerical error.--Section 6213(g)(2) is amended--
                    (A) in subparagraph (P), by striking ``and'' at the 
                end,
                    (B) in subparagraph (Q), by striking the period at 
                the end and inserting ``, and'', and
                    (C) by inserting after subparagraph (Q) the 
                following:
                    ``(R) an omission of information or documentation 
                required under section 25C(b)(6)(B) (relating to home 
                energy audits) to be included on a return.''.

    (g) Identification Number Requirement.--
            (1) In general.--Section 25C, as amended by this section, is 
        amended by redesignating subsection (h) as subsection (i) and by 
        inserting after subsection (g) the following new subsection:

    ``(h) <>  Product Identification Number 
Requirement.--
            ``(1) <>  In general.--No credit 
        shall be allowed under subsection (a) with respect to any item 
        of specified property placed in service after December 31, 2024, 
        unless--
                    ``(A) such item is produced by a qualified 
                manufacturer, and
                    ``(B) the taxpayer includes the qualified product 
                identification number of such item on the return of tax 
                for the taxable year.
            ``(2) Qualified product identification number.--For purposes 
        of this section, the term `qualified product identification 
        number' means, with respect to any item of specified property, 
        the product identification number assigned to such item by the 
        qualified manufacturer pursuant to the methodology referred to 
        in paragraph (3).
            ``(3) Qualified manufacturer.--For purposes of this section, 
        the term `qualified manufacturer' means any manufacturer of 
        specified property which enters into an agreement with the 
        Secretary which provides that such manufacturer will--
                    ``(A) assign a product identification number to each 
                item of specified property produced by such manufacturer 
                utilizing a methodology that will ensure that such 
                number (including any alphanumeric) is unique to each 
                such item (by utilizing numbers or letters which are 
                unique to such manufacturer or by such other method as 
                the Secretary may provide),
                    ``(B) label such item with such number in such 
                manner as the Secretary may provide, and
                    ``(C) <>  make periodic written 
                reports to the Secretary (at such times and in such 
                manner as the Secretary may provide) of the product 
                identification numbers so assigned and including such 
                information as the Secretary may require with respect to 
                the item of specified property to which such number was 
                so assigned.

[[Page 136 STAT. 1946]]

            ``(4) Specified property.--For purposes of this subsection, 
        the term `specified property' means any qualified energy 
        property and any property described in subparagraph (B) or (C) 
        of subsection (c)(3).''.
            (2) Omission of correct product identification number 
        treated as mathematical or clerical error.--Section 6213(g)(2), 
        as amended by the preceding provisions of this Act, 
        is <>  amended--
                    (A) in subparagraph (Q), by striking ``and'' at the 
                end,
                    (B) in subparagraph (R), by striking the period at 
                the end and inserting ``, and'', and
                    (C) by inserting after subparagraph (R) the 
                following:
                    ``(S) an omission of a correct product 
                identification number required under section 25C(h) 
                (relating to credit for nonbusiness energy property) to 
                be included on a return.''.

    (h) Energy Efficient Home Improvement Credit.--
            (1) In general.--The heading for section 25C is amended by 
        striking ``nonbusiness energy property'' and inserting ``energy 
        efficient home improvement credit''.
            (2) Clerical amendment.--The table of sections for subpart A 
        of part IV of subchapter A of chapter 1 <>  is amended by striking the item relating to section 25C 
        and inserting after the item relating to section 25B the 
        following item:

``Sec. 25C. Energy efficient home improvement credit.''.

    (i) <>  Effective Dates.--
            (1) In general.--Except as otherwise provided by this 
        subsection, the amendments made by this section shall apply to 
        property placed in service after December 31, 2022.
            (2) Extension of credit.--The amendments made by subsection 
        (a) shall apply to property placed in service after December 31, 
        2021.
            (3) Identification number requirement.--The amendments made 
        by subsection (g) shall apply to property placed in service 
        after December 31, 2024.

Resources / References
  • IRS main help page on the law - here
  • IRS FAQ on energy efficient home improvements and residential clean energy property credits here
  • Full Law Text - here
  • Database where you can lookup fed/state rebates/credits in your area - here
  • Resouces by a company that has a energy waste focus - here
  • Resources by an organization looking to move people to electric power - here
  • Calculator for rebate income eligibility in your area - here
Last edited by Calvert on Thu Jan 26, 2023 10:03 am, edited 3 times in total.
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BogleFanGal
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by BogleFanGal »

Thank you for posting and helping others make better sense of it all. I noticed income qualifications state "gross income" - any chance this could vary by state - i.e. using AGI vs gross income?
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by talzara »

BogleFanGal wrote: Sat Jan 21, 2023 3:01 pm Thank you for posting and helping others make better sense of it all. I noticed income qualifications state "gross income" - any chance this could vary by state - i.e. using AGI vs gross income?
It does not say "gross income." It says "annual income," and it compares it to area median income.
(i) 50 percent of the cost of the qualified electrification project for a household the annual income of which is not less than 80 percent and not greater than 150 percent of the area median income; and
(ii) 100 percent of the cost of the qualified electrification project for a household the annual income of which is less than 80 percent of the area median income;
Area median income is used to qualify for subsidized housing, and the Department of Housing and Urban Development has its own income calculation to compare to AMI. However, the IRA does not say that you have to use HUD methodology to calculate "annual income."

Since the program will be administered by the states, the income calculation will be whatever your state decides to use.
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Calvert
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Calvert »

BogleFanGal wrote: Sat Jan 21, 2023 3:01 pm Thank you for posting and helping others make better sense of it all. I noticed income qualifications state "gross income" - any chance this could vary by state - i.e. using AGI vs gross income?
Hi BogleFanGal

Great question on "what is income".

I was relying on the calculator link I posted. They have a FAQ on how the calculator works. here
Unfortunately, the FAQ and most of the stuff I've seen about HUD are not super clear.

A conservative approach would be to assume that you need to use Total Income on 1040 line 9. This is unfortunate because it takes away alot of the flexibility to control income with retirement or HSA contributions. Self employed people could still have expenses.

However, I did find that under the 2022 Homeowners Assistance Fund (COVID mgt and expense help), where a similar 150% of Area Medium Income is used, they have the following treasury guidance.
Income Determinations. With respect to each household applying for assistance, HAF
participants may use HUD’s definition of “annual income” in 24 CFR 5.609 or use adjusted
gross income as defined for purposes of reporting on Internal Revenue Service (IRS) Form 1040
series for individual federal annual income tax purposes.
The full document is here.

I'm going to see if I can find any info on how my state administered the HAF program. But we will likely need to wait this year to find out the actual state details. :annoyed
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by curmudgeon »

An interesting space that I'll have to track. Some of these could be plausible improvements in our 60-year old house. One challenge in our case is that our solar panels are almost perfectly sized for our current electrical usage, and shifting anything more to electric would make us vulnerable to the extremely high California electrical rates. We could add to the solar, but then we'd probably lose our spot in advantageous NEM 2.0 net metering plan. Lots of details to consider, and of course tax credits are only useful if you have tax liabilities to balance them against.

Can the tax credits here be carried forward to future years?
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by BogleFanGal »

Calvert wrote: Sat Jan 21, 2023 5:07 pm
BogleFanGal wrote: Sat Jan 21, 2023 3:01 pm Thank you for posting and helping others make better sense of it all. I noticed income qualifications state "gross income" - any chance this could vary by state - i.e. using AGI vs gross income?
Hi BogleFanGal

Great question on "what is income".

I was relying on the calculator link I posted. They have a FAQ on how the calculator works. here
Unfortunately, the FAQ and most of the stuff I've seen about HUD are not super clear.

A conservative approach would be to assume that you need to use Total Income on 1040 line 9. This is unfortunate because it takes away alot of the flexibility to control income with retirement or HSA contributions. Self employed people could still have expenses.

However, I did find that under the 2022 Homeowners Assistance Fund (COVID mgt and expense help), where a similar 150% of Area Medium Income is used, they have the following treasury guidance.
Income Determinations. With respect to each household applying for assistance, HAF
participants may use HUD’s definition of “annual income” in 24 CFR 5.609 or use adjusted
gross income as defined for purposes of reporting on Internal Revenue Service (IRS) Form 1040
series for individual federal annual income tax purposes.
The full document is here.

I'm going to see if I can find any info on how my state administered the HAF program. But we will likely need to wait this year to find out the actual state details. :annoyed
So digging deeper, I did find below in their 34-page Rewiring America Guide - which I found pretty helpful overall and can be downloaded from their website or when you register your email for updates.

"For HEEHRA eligibility, will household income be based on AGI or Gross Income? And what’s the difference? Household income will likely be based on AGI, or Adjusted Gross Income, but we won’t know for sure until the programs are implemented by each state. Your Gross income is your total income (including wages, dividends, retirement distributions, and other income). Your AGI is your Gross income minus any adjustments such as retirement contributions, student loan interest, or alimony payments. Here is how the IRS defines Gross Income and AGI."

Now...the next thing I'd like to know: Which year will they use to verify annual income? Prior year (as PPP, IRS and other govt programs often do) or the actual year you do the purchases/installs? For those with uncertainty year to year (self employed) or others working now, but pondering retirement, huge timing factor.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by teen persuasion »

curmudgeon wrote: Sat Jan 21, 2023 5:44 pm An interesting space that I'll have to track. Some of these could be plausible improvements in our 60-year old house. One challenge in our case is that our solar panels are almost perfectly sized for our current electrical usage, and shifting anything more to electric would make us vulnerable to the extremely high California electrical rates. We could add to the solar, but then we'd probably lose our spot in advantageous NEM 2.0 net metering plan. Lots of details to consider, and of course tax credits are only useful if you have tax liabilities to balance them against.

Can the tax credits here be carried forward to future years?
+1 on the limited usefulness of non-refundable tax credits to many. :oops:
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Calvert
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Calvert »

teen persuasion wrote: Sat Jan 21, 2023 10:36 pm +1 on the limited usefulness of non-refundable tax credits to many. :oops:
Really? The top of the 10% bracket for mfj is about 2k liability, right ? I'm going to have to figure out how you folks are doing it. I've got so much of my money in that damn tIRA, I have to sing patriotic songs as I do my taxes. It at least takes the edge off :beer
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ResearchMed
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by ResearchMed »

There seem to be two parts to the incentives:

An "upfront discount"
and
an "available tax credit".

Playing around with the calculator *very* briefly showed that the Upfront Discount is a *cliff*.

Be at one income level, and there's $14k.
Increase the income by $1 at a certain point, and that Upfront Discount plummets to zero.

This reminds me of the IRMAA surcharge for Medicare. :annoyed

I only tried the calculator like this at one zipcode, one family size, one homeowner status, etc.

RM
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Longdog »

Calvert wrote: Sun Jan 22, 2023 11:41 am
teen persuasion wrote: Sat Jan 21, 2023 10:36 pm +1 on the limited usefulness of non-refundable tax credits to many. :oops:
Really? The top of the 10% bracket for mfj is about 2k liability, right ? I'm going to have to figure out how you folks are doing it. I've got so much of my money in that damn tIRA, I have to sing patriotic songs as I do my taxes. It at least takes the edge off :beer
Perhaps, while singing that patriotic song, you can also recall with great fondness the deduction in taxable income you took when you moved the money to the tIRA way back yonder.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Calvert »

Longdog wrote: Sun Jan 22, 2023 12:33 pm Perhaps, while singing that patriotic song, you can also recall with great fondness the deduction in taxable income you took when you moved the money to the tIRA way back yonder.
Ahhh yes. It was a long tortured route. My paycheck to a 401k, and eventually rollovers to that tIRA. Thinking about those employer matches does put a smile on my face. :D Thanks
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by teen persuasion »

Calvert wrote: Sun Jan 22, 2023 11:41 am
teen persuasion wrote: Sat Jan 21, 2023 10:36 pm +1 on the limited usefulness of non-refundable tax credits to many. :oops:
Really? The top of the 10% bracket for mfj is about 2k liability, right ? I'm going to have to figure out how you folks are doing it. I've got so much of my money in that damn tIRA, I have to sing patriotic songs as I do my taxes. It at least takes the edge off :beer
Mostly, kids and kid-related credits, and Saver's credit. Save lots in trad 401k equivalents to reduce AGI.

A few years back: CTC under 17 $2000/$600 non-refundable, CTC 17+ $500 non-refundable, AOTC $2500/60% non-refundable, Saver's credit max $2000 non-refundable. $4600 non-refundable, maybe $500 tax owed, thus $4100 wasted.

If we increase our AGI in an attempt to use up the non-refundable credits (while working: use Roth instead of trad; after: Roth convert) we phase ourselves out of the Saver's credit, as well as out of other fully refundable credits like EITC, and increase our EFC - reducing financial aid for the college students, and trigger extra state taxes.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Longdog »

BogleFanGal wrote: Sat Jan 21, 2023 6:55 pm Now...the next thing I'd like to know: Which year will they use to verify annual income? Prior year (as PPP, IRS and other govt programs often do) or the actual year you do the purchases/installs? For those with uncertainty year to year (self employed) or others working now, but pondering retirement, huge timing factor.
Since the rebate is given at the point of sale/time of purchase, it would seem the only thing available at that time would be the prior year's annual income. Right?
Steve
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by talzara »

Calvert wrote: Sat Jan 21, 2023 5:07 pm However, I did find that under the 2022 Homeowners Assistance Fund (COVID mgt and expense help), where a similar 150% of Area Medium Income is used, they have the following treasury guidance.
Income Determinations. With respect to each household applying for assistance, HAF
participants may use HUD’s definition of “annual income” in 24 CFR 5.609 or use adjusted
gross income as defined for purposes of reporting on Internal Revenue Service (IRS) Form 1040
series for individual federal annual income tax purposes.
The full document is here.

I'm going to see if I can find any info on how my state administered the HAF program. But we will likely need to wait this year to find out the actual state details. :annoyed
It also depends on which state agency administers the electrification incentives.

The Homeowners Assistance Fund was likely administered by a state housing agency, which is more likely to use the HUD income calculation. However, several states are already running energy-efficiency programs, and a state energy agency could also be selected to administer the electrification incentives.

If a state is smart, it will adopt the IRS calculation since it would bring more federal money into the state. However, not every state is smart.
RubyTuesday
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by RubyTuesday »

Calvert wrote: Sat Jan 21, 2023 1:15 pm
Resources / References
  • IRS main help page on the law - here
  • Full Law Text - here
  • Database where you can lookup fed/state rebates/credits in your area - here
  • Resouces by a company that has a energy waste focus - here
  • Resources by an organization looking to move people to electric power - here
  • Calculator for rebate income eligibility in your area - here
The IRS also has a Fact Sheet with
Frequently asked questions about energy efficient home improvements and residential clean energy property credits


You may want to add this to the OP.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
LakesandRivers
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by LakesandRivers »

curmudgeon wrote: Sat Jan 21, 2023 5:44 pm We could add to the solar, but then we'd probably lose our spot in advantageous NEM 2.0 net metering plan.
As long as you submit the application to add panels to your utility by 4/14/23 you will keep your nem2 status. The installation itself can be completed later. Knowing how fast energy prices are rising I’d see if you can get your installer to put together an add-on system and submit it ASAP.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by frisbee »

Just bought a 1970's house that DW and I are fully remodeling (work cannot be deferred). I'm struggling to understand what credits I'm going to qualify for (especially when do I max out?).

Included are some things we are doing that may qualify for credits (We have a high income that eliminates us from rebates).
Heat pump - $6600
New energy efficient windows (replacing single pane) - $8k
New energy efficient doors - $6k
Insulate attic - $2500
New electric appliances (range, fridge, etc)

My understanding is that I can claim 30% of the heat pump (up to a max of $2k) plus another 30% of various "stuff" (up to $1200).
So my total credit in 2023 would be $3200. Am I missing anything?

Ideally, we'd spread the renovation over multiple years to take advantage of the annual $1200 credit reset, but that's not an option.

Thanks in advance-Frisbee
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Maverick3320 »

Thanks for doing this research. [Off-topic comment removed - moderator ClaycordJCA.]
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Calvert »

RubyTuesday wrote: Tue Jan 24, 2023 7:34 am
The IRS also has a Fact Sheet with
Frequently asked questions about energy efficient home improvements and residential clean energy property credits

You may want to add this to the OP.
RubyTuesday, thank you ... I've added this great find to the OP.


curmudgeon wrote: Sat Jan 21, 2023 5:44 pm
Can the tax credits here be carried forward to future years?
Curmudgeon, RubyTuesday was able to find the answer from the IRS FAQ. Short answer is no to the types of credits I was researching (HVAC, doors, appliances, etc.). Yes on solar, battery backups, etc.
Q4. May a taxpayer carry forward unused credits to another tax year? (added December 22, 2022)
A4. The rules vary by credit.
• Under the Energy Efficient Home Improvement Credit: a taxpayer may not carry the credit forward. Thus, if a
taxpayer does not have sufficient tax liability to claim all or a portion of the credit in the year in which the
related property for which the qualifying expenditure is placed in service, the unused amount of the credit may
never be claimed.
• Under the Residential Clean Energy Property Credit: a taxpayer may carry forward the unused amount of the
credit to reduce tax liability in future tax years.
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Calvert
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Calvert »

frisbee wrote: Wed Jan 25, 2023 9:28 pm I'm struggling to understand what credits I'm going to qualify for (especially when do I max out?).

My understanding is that I can claim 30% of the heat pump (up to a max of $2k) plus another 30% of various "stuff" (up to $1200).
So my total credit in 2023 would be $3200. Am I missing anything?
Hi frisbee

$3,200 sounds correct to me. That is "possible" every year.

Unfortunately, appliances do not have tax credits.
Doors, windows, weatherization, and electrical panels (with heat pump) seem to qualify for the $1200.

Here is a nice guide (BogleFanGal mentioned this above). It helps you make a plan, and even has a "case study" for high income folks. If you combine it with looking at the actual details in the law, you can likely nail it.
https://www.mncee.org/sites/default/fil ... 0Guide.pdf

edit
BWT, that guide seems to avoid combining the $2k credits with the $1,200 credits. Maybe they were unsure when they wrote it.
However, I found the following in the 1st IRS FAQ I linked above. Building envelope is windows, doors, insulation. I believe property is panels. The IRS FAQ states that heat pumps are separate. For ultimate confirmation, match back to the law.
Q2. Is there a limit on the amount of the Energy Efficient Home Improvement Credit that I can claim? (added December 22, 2022)
A2. Yes. There is a $1,200 aggregate yearly tax credit maximum for all building envelope components, home energy audits, and energy property. Electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and biomass boilers have a separate aggregate yearly credit limit of $2,000. Thus, the maximum total yearly energy efficient home improvement credit amount may be up to $3,200. See Q1 under the Examples section, for a set of examples illustrating how these credit limits work.
Last edited by Calvert on Thu Jan 26, 2023 9:54 am, edited 1 time in total.
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Mike Scott
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by Mike Scott »

Thanks for pulling all of this info together! I have seen some of the pieces but have not had time to pull it together like this. We have some planned improvements that will probably fit.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by daheld »

Thanks for this. It is really helpful. We have a furnace and water heater that are both between 15 and 20 years old. I am really hoping both make it until this program is implemented and we can take advantage of the point of sale rebates. According to the calculator, we can't make more than $129k before falling off the rebate cliff. We made about $12k more than that last year, but that was with $20k extra income due to the sale of a classic car. I am thinking for this one year we will make all of our 401k contributions traditional in order to lower our AGI and hopefully stay under the income limit.

Again, thanks for putting this together. I've been googling for months but kind of struggling to link all the pieces together. I got in touch with our state energy department and they confirmed it will be at least late 2023 and possibly early 2024 before they have the program up and running. According to the person I spoke with, they've heard zero details from the feds about specifics on program implementation.

Edited to add: Never mind, we both got raises in 2022 and there's no way we'll qualify. The "cliff" aspect of the rebates really stinks.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by feehater »

daheld wrote: Thu Jan 26, 2023 10:32 am Thanks for this. It is really helpful. We have a furnace and water heater that are both between 15 and 20 years old. I am really hoping both make it until this program is implemented and we can take advantage of the point of sale rebates. According to the calculator, we can't make more than $129k before falling off the rebate cliff. We made about $12k more than that last year, but that was with $20k extra income due to the sale of a classic car. I am thinking for this one year we will make all of our 401k contributions traditional in order to lower our AGI and hopefully stay under the income limit.

Again, thanks for putting this together. I've been googling for months but kind of struggling to link all the pieces together. I got in touch with our state energy department and they confirmed it will be at least late 2023 and possibly early 2024 before they have the program up and running. According to the person I spoke with, they've heard zero details from the feds about specifics on program implementation.

Edited to add: Never mind, we both got raises in 2022 and there's no way we'll qualify. The "cliff" aspect of the rebates really stinks.
Last time I checked (several months ago), that calculator was using 2020 numbers and not adjusting for inflation. I am also very close to the cliff and am not making any moves until I find out the exact details of my state’s rules. And then if I happen to be under 150% for any given year, doing as much as possible in that year.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by ray.james »

When I looked into these numbers a few months back, it follow's HUD's definition of income and poverty guidelines. So the income is truly gross and not AGI. I am a California resident and I found this CA document quite helpful!

https://www.hcd.ca.gov/docs/grants-and- ... nc2k22.pdf

It explain how HUD defines as a median and low income for a region. What are the factors used for change in number of household. For ex, HUD uses 90% of 4 household median as median income for a household of size 3. Although the above document uses county medians, you can use city/zip median's which is on HUD's website for 2022 data. One data point of interest, a lot of federal programs use 50%, 80%, 100% and 120% median income in several calculations but none seem to use 150%; as this current inflation reduction act uses. But we can use HUD's raw data to calculate that. (I believe that is what the calculator does.)

As an example, in San Mateo county the median income for a family of 4 is 166000. So 150% of that to qualify for the lowest amount of rebate is 249K. Let me know if I misunderstood any aspects of this. I am hoping to add attic insulation this year and use this as a bonus.
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by daheld »

feehater wrote: Thu Jan 26, 2023 12:55 pm
daheld wrote: Thu Jan 26, 2023 10:32 am Thanks for this. It is really helpful. We have a furnace and water heater that are both between 15 and 20 years old. I am really hoping both make it until this program is implemented and we can take advantage of the point of sale rebates. According to the calculator, we can't make more than $129k before falling off the rebate cliff. We made about $12k more than that last year, but that was with $20k extra income due to the sale of a classic car. I am thinking for this one year we will make all of our 401k contributions traditional in order to lower our AGI and hopefully stay under the income limit.

Again, thanks for putting this together. I've been googling for months but kind of struggling to link all the pieces together. I got in touch with our state energy department and they confirmed it will be at least late 2023 and possibly early 2024 before they have the program up and running. According to the person I spoke with, they've heard zero details from the feds about specifics on program implementation.

Edited to add: Never mind, we both got raises in 2022 and there's no way we'll qualify. The "cliff" aspect of the rebates really stinks.
Last time I checked (several months ago), that calculator was using 2020 numbers and not adjusting for inflation. I am also very close to the cliff and am not making any moves until I find out the exact details of my state’s rules. And then if I happen to be under 150% for any given year, doing as much as possible in that year.
Thanks, this is good to know and keep in mind. Hoping our furnace and AC coil hang on long enough and we can eek under the limit.
id0ntkn0wjack
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by id0ntkn0wjack »

Rewiring America offers a handy calculator for rebates/credits under the IRA:

https://www.rewiringamerica.org/app/ira-calculator
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by mengo »

ray.james wrote: Thu Jan 26, 2023 1:21 pm When I looked into these numbers a few months back, it follow's HUD's definition of income and poverty guidelines. So the income is truly gross and not AGI. I am a California resident and I found this CA document quite helpful!

https://www.hcd.ca.gov/docs/grants-and- ... nc2k22.pdf

It explain how HUD defines as a median and low income for a region. What are the factors used for change in number of household. For ex, HUD uses 90% of 4 household median as median income for a household of size 3. Although the above document uses county medians, you can use city/zip median's which is on HUD's website for 2022 data. One data point of interest, a lot of federal programs use 50%, 80%, 100% and 120% median income in several calculations but none seem to use 150%; as this current inflation reduction act uses. But we can use HUD's raw data to calculate that. (I believe that is what the calculator does.)

As an example, in San Mateo county the median income for a family of 4 is 166000. So 150% of that to qualify for the lowest amount of rebate is 249K. Let me know if I misunderstood any aspects of this. I am hoping to add attic insulation this year and use this as a bonus.
So my understanding is that there are 2 different calculations of income.

1. HUD’s calculation of AMI is used to set the cutoffs to qualify for the rebates.

2. A household (or tax filer’s) income can be defined by the state, using whatever criteria they decide upon (such as AGI).

[Focusing just on the HUD AMI here:] Did some reading and HUD’s definition of AMI actually uses average rental prices in many urban areas, so for the tax rebates, many more people may qualify who may not expect to. For example, I originally understood that the rebates used median income, and I am way above the threshold in my area; however, using AMI puts me beneath the threshold for a 50% rebate. Additionally, HUD will re-calculate AMI in May of this year, and — pure speculation on my part — it seems AMI cutoffs will increase even higher because the input data will skip one year due to covid and the formula accounts for some recent inflation. I’m totally unclear if the state rebates in Fall 2023 will use the new AMI thresholds available in May.
UpstateNY86
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Re: Inflation Reduction Act - Home Improvement Rebates & Tax Credits

Post by UpstateNY86 »

Great post, thanks for all the information. Very excited to see how this takes shape, and how the POS rebates work.
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