Regardless of whether you approve of the most recent spending bill out of Washington D.C. or think that “Inflation Reduction Act” is a misnomer, now that it has been passed by Congress and signed by the President, it is law.

The best approach at this point for both individual and corporate taxpayers is to take advantage of the tax incentives that the legislation provides and identify the most effective ways to deal with new challenges presented by the legislation, such as the $80 million in additional funding for the Internal Revenue Service (IRS).

In this four-part series, “Demystifying the Inflation Reduction Act,” we highlight the key provisions in this bill that are likely to impact individuals, businesses, and corporations now and for years to come:

• In this part, we cover the Clean Vehicle Credit for individual taxpayers.
• In Part 2, we cover tax credits and rebates for offsetting the costs of making your home more energy efficient.
• In Part 3, we focus our attention on various provisions in the bill that will impact businesses and corporations.
• In Part 4, we cover other provisions in the bill, including tax incentives to help make healthcare more affordable and increased funding being allocated to the IRS.

Clean Vehicle Credit

The Act’s Clean Vehicle Credit replaces the current Qualified Plug-in Electric Drive Motor Vehicle Credit. It’s generally applicable to qualified electric vehicles, including plug-in hybrid electric vehicles (PHEVs) and hydrogen fuel cell electric vehicles (FCEVs) placed in service starting in 2023 through 2032. (PHEVs typically operate on electricity until the battery is depleted, at which point they run on gas. FCEVs are typically powered by hydrogen fuel cells.)

Key changes introduced in the Clean Vehicle Credit include but are not limited to the following: Continue reading…