Inflation Reduction Act Guide

Thanks to the recently enacted Inflation Reduction Act, families are eligible for hundreds of dollars a year in energy savings. The Inflation Reduction Act also includes direct savings for households to make crucial, cost-saving energy efficiency improvements to their home. 

To get the most out of these savings, households and businesses can take advantage of various tax credits and rebates to help make their homes and businesses more efficient, power their homes with clean energy, and lower the cost of purchasing electric and hybrid cars. 

The Inflation Reduction Act makes household savings available to you, including:

• Up to 30% (maximum of $1,200 per year) in tax credits for energy-efficient home improvements, including heat pumps;
• Up to 30% in tax credits for rooftop solar, batteries, geothermal heat pumps
• Up to $7,500 in tax credits for new clean vehicles, and up to $4,000 for used clean vehicles, depending on taxpayer income and other factors.
• Rebates for residential efficiency retrofits and electrification projects, including heat pumps, cooktops, and other appliances, along with the needed electrical upgrades depending on income.

My team put together this guide to help you understand the tax credits and rebates that may be available to you or your business. 

Rebates vs. Tax Credits

A rebate is money provided to help you reduce the cost of something. Rebates can be applied at the time of purchase, reducing the sales prices, or are sometimes provided after your purchase when you submit proof of purchase. Efficiency Maine processes rebates in Maine for residents and businesses.

A tax credit is an amount of money that reduces the dollar amount of taxes owed. Refundable tax credits provide a refund of the amount of the credit that still exists after reducing taxes owed to zero. Nonrefundable tax credits allow for no such refund.