The Inflation Reduction Act (IRA) became law in August. It features plenty of rebates and tax credits to help Americans buy things from electric vehicles to high-efficiency electrical appliances and heat pumps.
If you are ready to shift to electric but unsure what you qualify for, look into the IRA savings calculator from Rewiring America.
Rewiring America is a leading electrification nonprofit. Its purpose “is to make electrification simple, measurable, and inevitable.”
According to Electrek, the calculator helped confirm the amount of tax credit the US-made 2023 Volkswagen ID.4 qualified for.
Inflation Reduction Act savings calculator
We do not yet know how or when upfront discounts will be implemented in each state, so we cannot guarantee final amounts or timeline.
Rewiring America
Here is how the Inflation Reduction Act savings Calculator works: Type in your zip code, homeowner status (renters qualify as well), tax filing, your household income, and household size into the calculator, and click “Calculate.”
Then, it would display your personalized incentives and split tax credits from upfront discounts such as rebates.
Electrek made the “Smith family” as a case study: a hypothetical family of four, homeowner, joint tax filing, household income $100,000, Vermont zip code 05001.
The Smith family qualifies for $14,000 in discounts and $7,550 in tax credits.
As rebates (upfront discounts) are based on area median income percentage, the Smith’s area median income is $90,100, as they stay in the 05001 zip code area. Area median income could be found using the Area Median Income Lookup Tool from Fannie Mae.
High-Efficiency Electric Home Rebate Act (HEEHRA)
The High-Efficiency Electric Home Rebate Act (HEEHRA) offers point-of-sale customer rebates to allow low- and moderate-income US households to electrify their homes.
For instance, if the Smith family wishes to replace their gas stove with an electric stove, then they would qualify for 50% of electric/induction stove costs of up to $840, as their income ($100,000) is more than 100% of area median income ($90,100) in their Vermont zip code.
For low-income households (under 80% of the Area Median Income), HEEHRA covers 100% of the electric/induction stove costs up to $840. While in moderate-income households (between 80% and 150% of the Area Median Income), HEEHRA covers 50% of the electric/induction stove costs up to $840.
Total HEEHRA discounts in all qualified electrification projects are maxed at $14,000.
In addition, Rewiring America offers an easy-to-understand online guide to the IRA called “Go electric! (now).”
