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Tax Incentives

The Inflation Reduction Act includes numerous tax incentives to drive private investment into energy communities — attracting new industries, creating new local tax revenue, driving job growth and lowering energy costs.

Tax incentives are reviewed and updated weekly using publicly available information. Tax incentive details and open/close dates listed in tax incentive profiles are subject to change by the agencies.
TitleNew or Modified ProvisionEligible Recipients
Credit for Production of Clean Hydrogen 26 U.S. Code § 45VNew. The existing excise tax credit for liquified hydrogen terminates after 12/31/22.Tax Credit165
Energy Efficient Commercial Buildings Deduction - 26 U.S. Code § 179DModified and extended. Efficiency requirements updated.Building Designers, Commercial Property OwnersTax Credit165
New Energy Efficient Homes Credit - 26 U.S. Code § 45LModified and extended. The credit had previously expired at end of 2021.Retroactively extended with new rules effective for homes acquired after 2022.HomebuildersTax Credit165
Alternative Fuel Vehicle Refueling Property Credit - 26 U.S. Code § 30CExtended and modified to include prevailing wage and registered apprenticeship requirements for businesses claiming the credit. Adds bidirectional charging equipment, charging equipment for 2- and 3-wheel electric vehicles. Limited to low-income and non-urban areas.AFV Refueling PropertyTax Credit165
Residential Clean Energy Credit - 26 U.S. Code § 25DModified and extended. Credit extended at 30% through 2032,with phasedown through 2034. Battery storage newly eligible in 2023; biomass fuel propertycredit eliminated.Homeowners and RentersTax Credit165
Energy Efficient Home Improvement Credit - 26 U.S. Code § 25CModified and extended. Credit rate increased from 10% to 30%. Eligibility and standards are modified. $500/per taxpayer lifetime limit eliminated and replaced with increased annual limits.Homeowners and RentersTax Credit165
Credit for Carbon Oxide Sequestration - 26 U.S. Code § 45QExtended and modified, tying the credit amounts to meetingprevailing wage and registered apprenticeship requirements, providing an enhanced credit fordirect air capture (DAC), and lowering the carbon capture threshold requirements at facilities.CO2 Emitting FacilitiesTax Credit165
Sustainable Aviation Fuel Credit - 26 U.S. Code § 40BNewAviation, Clean Fuel ProducersTax Credit165
Clean Fuel Production Credit - 26 U.S. Code § 45ZNewClean Fuel ProducersTax Credit165
Extension of Second-Generation Biofuel Incentives - 26 U.S. Code § 40Extended from 12/31/2021 through 12/31/2024Clean Fuel ProducersTax Credit165
Extension of Tax Credit for Alternative Fuels - 26 U.S. Code § 6426(d), 26 U.S. Code § 6426(e), 26 U.S. Code § 6427€Extended from 12/31/2021 through 12/31/2024.Clean Fuel ProducersTax Credit165
Extension of Tax Credits for Biodiesel and Renewable Diesel - 26 U.S. Code § 40A, 26 U.S. Code § 6426(c), 26 U.S. Code § 6427€Extended from 12/31/2022 through 12/31/2024.Clean Fuel ProducersTax Credit165
Investment Tax Credit for Energy Property - 26 U.S. Code § 48Modified and extended to include standalone energy storage with capacity of at least 5 kWh, biogas, microgrid controllers (20MW or less), electrochromic glass, and interconnection property for small projects (5MW or less). Value of the credit tied to prevailing wage and registered apprenticeship requirements.Biogas, CHP, Energy Storage, Fuel Cell, Geothermal, Microgrid Controllers, Small Wind, SolarTax Credit165
Credit for Qualified Commercial Clean Vehicles - 26 U.S. Code § 45WNewVehicle ConsumersTax Credit165
Credit for Previously-Owned Clean Vehicles - 26 U.S. Code § 25ENewVehicle ConsumersTax Credit165
Clean Vehicle Credit - 26 U.S. Code § 30DModified and extended. Credit extended with new rules pertaining to final assembly in the United States, critical minerals/battery components, and foreign entities of concern. Per manufacturer limit is lifted.Vehicle ConsumersTax Credit165
Advanced Manufacturing Production Credit - 26 U.S. Code § 45XNewDomestic ManufacturersTax Credit165
Advanced Energy Project Credit - 26 U.S. Code § 48CModified and extended. 48C had been enacted in 2009 but was fully allocated after the 2nd allocation round in 2013. The Inflation Reduction Act provides $10 billion of allocations, directs a minimum share to energy communities, and expands eligibility to new types of projects.Critical Minerals, Industrial Facility, Manufacturing Facility, Manufacturing RetrofitTax Credit165
Clean Electricity Investment Tax Credit - 26 U.S. Code § 48ENewEnergy Storage, Zero GHG Electricity GeneratorsTax Credit165
Clean Electricity Production Tax Credit - 26 U.S. Code § 45YNewZero GHG Electricity GeneratorsTax Credit165
Zero-Emission Nuclear Power Production Credit - 26 U.S. Code § 45UNewNuclearTax Credit165
Increase in Energy Credit for Solar and Wind Facilities Placed in Service in Connection with Low-Income Communities - 26 U.S. Code § 48(e), 26 U.S. Code § 48E(h)NewEnergy Storage, Solar, WindTax Credit165
Production Tax Credit for Electricity from Renewables - 26 U.S. Code § 45Modified and extended. Extended for projects beginning construction before Jan. 1, 2025. Modified to tie the value of the credit to meeting prevailing wage and registered apprenticeship requirements.Biomass, Geothermal, Hydrokinetic, Hydropower, Landfill and Waste, Marine, Small Irrigation, Solar, WindTax Credit165
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