Last Chance to Claim Thousands of Dollars in Federal Tax Credits for Electric Cars and Home Improvements

Strategic Insights -

As Congress votes to end government incentives for renewable energy and energy-efficiency oriented purchases, homeowners and car buyers are racing against time to take advantage of thousands of dollars in federal tax credits before they disappear. The sudden deadlines for federal EV tax credits and green home improvements are causing a scramble to buy cars and start home projects before the credits expire. Homeowners can still apply for credits on certain energy-efficient home improvements, such as heat pumps and solar panels, until the end of the year.

Key Takeaways:

  • Federal EV tax credits will disappear on September 30, instead of in 2032 as originally planned under President Joe Biden.
  • Homeowners can still apply for credits on certain energy-efficient home improvements, such as heat pumps and solar panels, until the end of the year.
  • The Residential Clean Energy Credit covers 30 percent of the cost of buying and installing household solar panels, home batteries, solar water heaters, geothermal heat pumps, fuel cells or small wind turbines.
  • The average claim for the Residential Clean Energy Credit is worth $5,084.
  • The Energy Efficient Home Improvement Credit covers up to $3,200 each year for homeowners who upgrade to more efficient appliances or improve insulation.
  • The average claim for the Energy Efficient Home Improvement Credit is worth $882.
  • Credits for installing a home EV charger end with the fiscal year, and homeowners must install a charger by June 30, 2026, to get a credit for 30 percent of the cost, up to a maximum of $1,000.
  • The Home Electrification and Appliances Rebate Program will continue to offer thousands of dollars for installing heat pumps and electric stoves, replacing old wiring or upgrading insulation.
  • Homeowners in low-income or nonurban census tracts are eligible for credits for installing a home EV charger.

Statistics:

  • 3.4 million Americans claimed one or both credits for energy-efficient home improvements in 2023.
  • Nearly two-thirds of the money went to households earning $100,000 or more.
  • The average claim for the Residential Clean Energy Credit is worth $5,084.
  • The average claim for the Energy Efficient Home Improvement Credit is worth $882.
  • Credits for installing a home EV charger are available for up to a maximum of $1,000.
  • The Home Electrification and Appliances Rebate Program has a funding limit of $4.5 billion.

Sources:

  • IRS data on energy-efficient home improvement credits
  • Rewiring America, a nonprofit that advocates for electrification
  • Congressional budget cuts affecting federal tax credits for renewable energy and energy-efficiency oriented purchases
  • Ford, Hyundai, and GM rebates and discounts on installing home chargers when buying or leasing an EV
  • Home Efficiency Rebates Program in Michigan, Wisconsin, Indiana, North Carolina, Georgia, and D.C.