For the residential energy credits becoming available in 2023, how is the income calculated for the limit (which seems to be 150% of the median income - of what ? ) ?
I am planning a major renovation but am now on hold until all of this becomes clear.
Thanks
For the residential energy credits becoming available in 2023, how is the income calculated for the limit (which seems to be 150% of the median income - of what ? ) ?
From what I’ve been able to find, the income-based incentives are actually rebates, not tax credits, and they will be administered by your state. I would point out that there are two different tiers, one for those with less than 80% of the median income and one for those with 80% - 150% of the median income, where the median income is based on income ‘in your area’. Presumably, the state will provide the guidance on what ‘your area’ is - the entire state, your county, a Census MSA, or something else, in addition to providing what the definition of ‘income’ is - whether it’s just your AGI, or if there are adjustments to your AGI.
There are still tax credits on your federal return for things like solar installation, insulation, etc. and you may be able to combine those with the rebates in some cases.
Here’s a calculator that might help https://www.rewiringamerica.org/app/ira-calculator - although they appear to call the rebates an ‘upfront discount’.
AJ
Thanks ! It is even more complicated than I thought and the income area chosen can make a huge difference but I think waiting until 2023 still seems like a good idea.