The Inflation Reduction Act (IRA) of 2022, a landmark federal law with the goal of curbing inflation, has several deductions and tax credits that apply to single family and multifamily properties. Don’t miss out on the opportunity to take advantage of some new tax incentives. Below is a summary of the programs included in the IRA:
179D Tax Deduction for energy efficient buildings – The purpose of this program is to make both commercial and multifamily residential buildings more energy efficient. The amount of the deduction is $.50 to $1.00 per square foot based on the efficiency gain.
179D Tax Deduction for retrofits of existing buildings – This program is for existing properties and its purpose and the amount of the deduction is the same as the program mentioned above.
45L New Energy Efficient Home Tax Credit – This is a tax credit with a purpose to incentivize energy efficient new residential construction including both single family and multifamily properties. The credit is $500 per unit for multifamily properties and $2,500 for a single-family property.
45L New Energy Efficient Home Tax Credit-Bonus Zero Energy – This tax credit for single family homes and multifamily properties that meet the U.S. Department of Energy’s Zero Energy Ready Home program. The credit is $1,000 per unit for multifamily properties and $5,000 for a single-family home.
Section 48 Investment Tax Credit – The purpose of this tax credit is to encourage investment in renewable energy generation and other clean energy technologies. The tax credit is equal to 6% of the equipment cost and can be taken in the year that the equipment is placed into service.
30C Tax Credit for EV Charging Stations – This is a credit to incentivize the installation of Electric Vehicle charging stations by property owners. The credit is 6% of the cost of the equipment up to $100,000 for each charging station installed at a property.
For more information about these and other programs included in the IRA, please visit: https://www.irs.gov/inflation-reduction-act-of-2022.