The Inflation Reduction Act of 2022 brought changes to the Energy Efficient Home Improvement Credit for expenditures made on or after January 1, 2023. Expenditures made in 2022 fall under rules previously in place for residential energy credits.
In addition to the enhanced Energy Efficient Home Improvement Credit for 2023, the Act also expanded the Residential Clean Energy Property Credit. The credit is generally limited to qualified expenditures made for property placed in service beginning in 2022 through 2032.
This Fact Sheet offers more information and detail on each credit including eligibility requirements.
The Inflation Reduction Act of 2022 expanded tax credits for the purchase of electric vehicles. Vehicles purchased prior to August 17, 2022, must follow the rules in place before the enactment of the new law. Vehicles purchased in 2022 after August 16 must undergo final assembly in North America. For detailed information, read Credits for New Electric Vehicles purchased in 2022 or before.
Under the Act, the rules for Credits for New Clean Vehicles Purchased in 2023 or After have been changed. The act also added a credit for the purchase of Used Clean Vehicles.
The IRS has announced a delay in reporting thresholds for third-party settlement organizations (TPSOs) set to take effect for the upcoming tax filing season.
More information can be found on irs.gov through this link: 2022 1099K reporting requirements.
Note that all income is reportable whether or not you receive a 1099K. This Fact Sheet addresses circumstances in which an amount may be reported on a 1099K, but the amount may not be accurately classified as income. The Fact Sheet explains how to report these transactions appropriately on a tax return.
There are two new forms you will need to include with your 2021 tax information when you have your 2021 return prepared.
One is Letter 6419, 2021 Total Advanced Child Tax Credit Payments. For those of you who received Advanced Child Tax Credit payments in 2021, the IRS will mail this letter in January 2022, and your preparer will need it to correctly calculate any child tax credits due on your 2021 return.
The IRS will also mail Letter 6475, Your 2021 Economic Impact Payment. If you received less EIP than your 2021 Recovery Rebate Credit, you will get the additional amount on your 2021 tax return.
Be sure to keep both of these notices and include them with your 2021 tax information to make preparation of your 2021 return go more smoothly.
If you would like a comprehensive list of what you might need for 2021 tax preparation, please refer to our New Client Organizer on our Links You Can Use page.