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ECS ARTICLES & NEWS

Newsletter: Tax Credits and Benefits Update



Clean Vehicle Credit: Get Up to $7,500 Tax Credit for Your Electric Vehicle

Energy Efficient Home Improvement Credit: Save up to $3,200 on Green Upgrades

Child Tax Credit: Potential Changes on the Horizon

 

Clean Vehicle Credit: Up to $7,500 Tax Credit for Your Electric Vehicle

If you've recently purchased a new electric vehicle, you could be eligible for a tax credit of up to $7,500. Here's what you need to know:

  • Purchases made on or after January 1, 2023, may qualify.

  • Vehicles bought between January 1, 2023, and April 17, 2023, start with a baseline credit of $2,500, which can increase to $7,500 based on battery requirements. For purchases made from April 18, 2023, onward, two key criteria must be met: battery requirement and critical-minerals requirement.

  • The credit is phased out for certain income levels: $300,000 for married couples filing jointly, $225,000 for heads of households, and $150,000 for everyone else.

  • Both the dealer and the buyer need to report vehicle information for eligibility.

Energy Efficient Home Improvement Credit: Save up to $3,200 on Green Upgrades

  • The credit covers up to 30 percent of qualified expenses for home-energy updates.

  • Eligible improvements include new windows and doors, heat-pump installations, and home-energy audits, each with its own credit cap.

  • No income minimums or maximums apply for this credit.

  • Make sure to keep receipts and documentation to prove that upgrades meet the requirements.

Child Tax Credit: Potential Changes on the Horizon

While the Child Tax Credit remains the same for now, changes could be on the way. Here's what you should know:

  • An expanded version of the credit has passed through the House of Representatives, with changes that could mainly benefit lower-income families.

  • The refundable portion of the additional child tax credit may increase to $1,800 per child in 2023, $1,900 per child in 2024, and $2,000 per child in 2025, adjusting for inflation.

  • Keep an eye on legislation that could impact the credit after the April filing deadline.

  • The IRS will retroactively apply any changes, so there's no need for an amended return if legislation passes after you file your taxes.

 

Understanding these rules is crucial for accurate tax filings. If you have any questions or need personalized assistance, please don't hesitate to reach out.

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