New York Congressman Paul Tonko attended a virtual briefing this week aimed at educating the public on how to save money and protect the planet by taking advantage of the federal Inflation Reduction Act.
In August 2022, President Biden signed the many-faceted Inflation Reduction Act into law, hailed as a milestone as the nation gravitates toward clean energy in the face of climate change.
The IRA contains several provisions to support the nation’s offshore wind development and supporters say it's poised to lead the way toward lowering energy costs in the U.S., ultimately reducing the inflation rate.
Tonko, a Democrat from the 20th district, touted the IRA's numerous tax credits available for individuals and businesses aiming to ease their transition to cleaner energy consumption.
“People have to be made aware that incentives are out there, and that they can result in major savings on your energy bills," Tonko said. "The advocacy group Rewiring America found that those savings could be as high as $1,800 annually for an average household. And as you know, these individual tax credits and rebates are designed to promote energy efficiency, and electrification. They cover residential equipment and appliances, such as the installation of heat pumps and add home EV chargers and solar panels on roofs. They also cover insulation, high performing windows, electrical upgrades of wiring, and other elements of home retrofits. Not only will these replacements reduce greenhouse gas pollution, but they will save people money, money on their utility bills, their fuel bills, and certainly help stretch that home budget.”
Tonko says if all goes according to plan, most of the IRA credits will be in place at least through 2030. He say it’s yet to be determined who exactly is eligible for each credit, which specific products and brands qualify, and when these credits and rebates will be available to be claimed.
"So there's work for everyone there in terms of public education, and trying to decipher IRS guidelines about tax credits is complicated stuff," said Tonko. "This will take some time and not all the details are yet worked out. For tax credits, some information has already been released, and more should be coming out in the near future. But rebates that may be, will be required to take hold here might take to the end of the year for all the necessary info to be available. And I'm really hoping that the administration will implement these credits in a way that is consumer friendly, so that people are able to take full advantage of them."
Climate activist Paul Fisk says C02 and methane released when fossil fuels are burned, trap heat and warm the planet, while gas and diesel engines pollute and waste much of their energy as heat.
"They say that some 42% of America's energy related emissions come from the decisions we make around the kitchen table," Fisk said. "By that I mean the millions of machines we purchase for our homes, the stoves, grills, cooktops, water heaters, dryers, space heaters, furnaces, and of course our vehicles. There are many opportunities to electrify and improve efficiency in our households. You can get community solar and wind in some cases, efficient heat pumps, high performance envelopes, and then insulation for your home. High performance windows, smart building controls, efficient electric water heater, efficient electric appliances and lighting. And of course, our vehicles."
Fisk adds that electrification incentives come in two parts, tax credits and rebates, which should be available later this year and when you file your 2023 income tax returns. Fisk says the IRS is handling the program and issuing rules on the credits. Each program has specific eligibility requirements and other parameters. And they're generally available to all homes with some income limits for vehicles. How do you claim the credits?
"Make sure your household will owe enough federal income tax to be offset by the value of the credit," said Fisk. "Make sure your purchase meets the tech tax credits relevant, relevant efficiency and product standards. Save the receipts and get ready to fill out the IRS forms with your taxes. The credits are not refundable. So you need to have adequate federal income tax liability to claim them. Renters are going to be eligible for portable equipment. The electrification efficiency credits are not eligible for, available for new construction, but the solar and storage credits are." More from Fisk below:
Click here to read the Inflation Reduction Act Guidebook [PDF]
Download a list of Inflation Reduction Act funding programs in the guidebook.
