4 Ways the Inflation Reduction Act (IRA) Can Help You
Times are tough, and wallets are tight. Everyone is feeling the sweeping impacts of inflation, especially homeowners. Americans are looking for relief from rising energy bills to increasing healthcare costs. Fortunately, the recently signed Inflation Reduction Act aims to provide some aid during these difficult times.
Read on to learn more about the opportunities homeowners can explore under the Inflation Reduction Act.
The Inflation Reduction Act Defined
In August 2022, President Biden signed the Inflation Reduction Act into law. This monumental piece of legislation aims to help homeowners through three main focuses: taxes, healthcare, and renewable energy initiatives.
Taxes
Under the Inflation Reduction ACT, companies with at least $1 billion in annual income will have a 15% corporate minimum tax rate. The hope is that the new tax rate will help close loopholes exploited by large corporations that currently pay little to no taxes each year.
The IRA will also invest in the IRS to help this organization complete its mission more effectively and efficiently. This investment should help crack down on tax evasion.
While creating the corporate tax rate and beefing up funding for the IRS does not directly impact homeowners, funds at the federal level could go into programs to help ease the burdens of inflation.
Healthcare
Anyone who has ever been sick or injured enough to need a doctor knows just how burdensome healthcare can be. The Inflation Reduction Act starts with extending the Affordable Care Act (ACA), which will help nearly three million Americans maintain health insurance. The IRA also allows Medicare to negotiate various prescription drug prices.
With fewer out-of-pocket expenses for healthcare and prescription medicines, homeowners should have more money to spend in other areas of their budgets.
Renewable Energy
While the fight against climate change may not seem like a direct way to impact inflation, the IRA takes an exciting approach to encourage homeowners to go green. In fact, there are many ways homeowners can save by making eco-friendly upgrades to their properties and joining the electrification movement. The IRA plans to invest $369 billion in energy security and climate change efforts.
When homeowners are rewarded for joining the electrification movement, they benefit from more efficient homes, lower energy costs, and significant tax savings.
4 Ways Homeowners Save with the Inflation Reduction Act
A great deal of the funds set aside for green initiatives will bolster renewable energy production and access; the IRA includes a variety of impactful tax rebates and incentives that homeowners can enjoy.
Electric Car Rebate
Starting in 2023, car shoppers can save when they buy a new or used electric vehicle. Electric vehicles continue to rise in popularity, and more drivers are open to the idea of driving a fully electric or plug-in hybrid. While there are some more affordable EVs on the market, the most potent and capable models are a still out of the price range of many.
Under the IRA, shoppers can earn a rebate of up to $7,500 for a qualifying new EV and up to $4,000 for a used EV. Vehicles must meet several requirements to qualify:
New electric sedans must cost under $55,000
New electric trucks, vans, and SUVs must cost under $80,000
A certain percentage of minerals in the battery must come from North America or a country with a free-trade agreement with the U.S.
Vehicles must be mostly assembled in North America.
Rebates on electric vehicle purchases occur at the point of sale, so you do not have to wait until tax season to experience the savings.
Home Electric Vehicle Charging Stations
The Inflation Reduction Act, according to President Biden, will invest $900 billion into a nationwide EV charging station investment plan. The plan is to build 100 million charging stations across 35 states and 53,000 miles of national highways.
The IRA electric vehicle charger incentive helps homeowners add Level 2 chargers to their homes. The program provides a rebate of up to 30% of your equipment and installation costs of up to $1,000. The best part of the EV charging station portion of the IRA is retroactive throughout 2022.
Charging an EV at home has never been easier, and the EV charger tax credit makes enjoying this convenience even more affordable.
Go Solar
The Residential Clean Energy Credit, part of the IRA, provides homeowners with a tax credit of up to 30% of the cost of going solar. This provision is also retroactive to the beginning of 2022.
The cost of installing solar panels, on average, is $19,000. This tax incentive can save homeowners $5,700, not to mention the average savings on electricity. Of course, homeowners who create a microgrid with solar power backup batteries can increase these savings even more.
Upgrade Your Electrical Panel
Even if they are eager to join the electrification movement, many homeowners are limited by their home’s electrical system. Older homes often have 100-amp electrical panels that cannot handle the demand of modern technologies. More importantly, electrical panels by Federal Pacific and Zinsco are unsafe for residential use.
The Inflation Reduction Act provides a tax credit for up to $4,000 to upgrade your electrical panel. You can earn an additional $2,500 rebate for updating the electrical wiring in your home. Before you can add a smart electric panel, an EV charging station, or even new electrical appliances, you may need to upgrade your electrical panel first. Check with your local electrician to evaluate your current electrical grid and what you will need to upgrade.
Enhance Your Home with Watson’s Charging Stations & Electric
If you have been waiting for the right time to join the electrification movement and make upgrades to your home, let Watson’s Charging Stations & Electric get to work for you. From inspecting your home’s existing electrical system to configuring a microgrid, home EV charger, or smart electrical panel, our licensed electricians have the experience and skill to get the job done right.
Thanks to the benefits of the Inflation Reduction Act, you can improve your Gilroy, CA, or Santa Clara valley home at a fraction of the cost. Schedule your free consultation for your next electrical project today.