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.
Title | New or Modified Provision | Eligible Recipients | Funding Type | Program Purpose | Funding Source | Funding Type |
---|---|---|---|---|---|---|
Credit for Production of Clean Hydrogen 26 U.S. Code § 45V | New. The existing excise tax credit for liquified hydrogen terminates after 12/31/22. | Tax Credit | 165 | |||
Energy Efficient Commercial Buildings Deduction - 26 U.S. Code § 179D | Modified and extended. Efficiency requirements updated. | Building Designers, Commercial Property Owners | Tax Credit | 165 | ||
New Energy Efficient Homes Credit - 26 U.S. Code § 45L | Modified and extended. The credit had previously expired at end of 2021.Retroactively extended with new rules effective for homes acquired after 2022. | Homebuilders | Tax Credit | 165 | ||
Alternative Fuel Vehicle Refueling Property Credit - 26 U.S. Code § 30C | Extended 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 Property | Tax Credit | 165 | ||
Residential Clean Energy Credit - 26 U.S. Code § 25D | Modified and extended. Credit extended at 30% through 2032,with phasedown through 2034. Battery storage newly eligible in 2023; biomass fuel propertycredit eliminated. | Homeowners and Renters | Tax Credit | 165 | ||
Energy Efficient Home Improvement Credit - 26 U.S. Code § 25C | Modified 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 Renters | Tax Credit | 165 | ||
Credit for Carbon Oxide Sequestration - 26 U.S. Code § 45Q | Extended 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 Facilities | Tax Credit | 165 | ||
Sustainable Aviation Fuel Credit - 26 U.S. Code § 40B | New | Aviation, Clean Fuel Producers | Tax Credit | 165 | ||
Clean Fuel Production Credit - 26 U.S. Code § 45Z | New | Clean Fuel Producers | Tax Credit | 165 | ||
Extension of Second-Generation Biofuel Incentives - 26 U.S. Code § 40 | Extended from 12/31/2021 through 12/31/2024 | Clean Fuel Producers | Tax Credit | 165 | ||
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 Producers | Tax Credit | 165 | ||
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 Producers | Tax Credit | 165 | ||
Investment Tax Credit for Energy Property - 26 U.S. Code § 48 | Modified 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, Solar | Tax Credit | 165 | ||
Credit for Qualified Commercial Clean Vehicles - 26 U.S. Code § 45W | New | Vehicle Consumers | Tax Credit | 165 | ||
Credit for Previously-Owned Clean Vehicles - 26 U.S. Code § 25E | New | Vehicle Consumers | Tax Credit | 165 | ||
Clean Vehicle Credit - 26 U.S. Code § 30D | Modified 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 Consumers | Tax Credit | 165 | ||
Advanced Manufacturing Production Credit - 26 U.S. Code § 45X | New | Domestic Manufacturers | Tax Credit | 165 | ||
Advanced Energy Project Credit - 26 U.S. Code § 48C | Modified 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 Retrofit | Tax Credit | 165 | ||
Clean Electricity Investment Tax Credit - 26 U.S. Code § 48E | New | Energy Storage, Zero GHG Electricity Generators | Tax Credit | 165 | ||
Clean Electricity Production Tax Credit - 26 U.S. Code § 45Y | New | Zero GHG Electricity Generators | Tax Credit | 165 | ||
Zero-Emission Nuclear Power Production Credit - 26 U.S. Code § 45U | New | Nuclear | Tax Credit | 165 | ||
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) | New | Energy Storage, Solar, Wind | Tax Credit | 165 | ||
Production Tax Credit for Electricity from Renewables - 26 U.S. Code § 45 | Modified 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, Wind | Tax Credit | 165 |