How the Inflation Reduction Act Could Help You Save Money

If you're looking to make your home more energy efficient or you're thinking of buying an electric car, you may find some savings in the Inflation Reduction Act that became law earlier this year. 

"The act represents the largest federal investment to fight climate change in U.S. history," said Flavio Carrillo of FIU's School of Business.

CREDITS FOR MAKING CERTAIN HOME ENERGY-EFFICIENT IMPROVEMENTS

Starting in 2023, the energy-efficient home improvement credit will be 30% of the costs of all eligible home improvements made in a year, with a maximum credit of $1,200. There are also annual limits for specific types of upgrades, including energy star doors or windows, energy-efficient central air conditioners, electric panels and heat pump water heaters.

"In the later part of '23, some eligible consumers may also qualify for point of sale rebates that do help improve home energy used by upgrading to qualified efficient appliances and these additional savings could actually total up to $14,000," Carrillo said.

CLEAN VEHICLE CREDIT

Under the Clean Vehicle Credit, you may be eligible for tax credits of up to $7,500 for new electric vehicles and up to $4,000 for used electric vehicles. But there are some requirements that need to be met. There are also limitations on how expensive the vehicle can be as well as household income levels.

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"That's why many experts are suggesting ... if you're thinking of buying an electric vehicle, do so now, prior to the beginning of the new year because there are many different criteria that must be met," Carrillo said.

To learn more about the tax credits and rebates and the different requirements and restrictions, click here.