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1 1 (September 16, 2024)

handle is hein.crs/goveqqe0001 and id is 1 raw text is: Preliminary Data on the IRA Residential Clean Energy Credit September 16, 2024 In August 2024, the Internal Revenue Service (IRS) released preliminary 2023 data on the residential clean energy credit (RCEC) and the energy efficient home improvement credit (EEHIC). The credits were scheduled to expire at the end of 2023 and 2021, respectively, before being reinstated and expanded by P.L. 117-169 (commonly known as the Inflation Reduction Act of 2022, IRA). This publication describes the fiscal cost, uptake among high-income taxpayers, geographic distribution, and energy sources used to claim the RCEC. A companion Insight, CRS Insight IN 12422, Preliminary Data on the IRA Energy Efficient Home Improvement Credit, provides similar analysis of the EEHIC. The Residential Clean Energy Credit (RCEC) The RCEC, authorized in 26 U.S.C. §25D, subsidizes taxpayer purchases of renewable energy equipment used at taxpayer residences. Between 2022 and 2032, individuals and couples installing solar electric panels, solar water heaters, small wind energy property, geothermal heat pumps, and other renewable energy equipment can receive an RCEC equivalent to 30% of the costs of purchasing, assembling, and installing such equipment. The credit phases down to 26% for equipment placed in service in 2033 and to 22% for equipment placed in service in 2034 before expiring for equipment placed in service after 2034. Both renters and homeowners may claim the credit for domestically located homes in which they reside; landlords who rent property to others are not eligible. The RCEC is nonrefundable, meaning that if a taxpayer's RCEC is greater than their income tax liability, the taxpayer may not receive a refund for the difference. However, unlike the EEHIC, unused credit amounts may be carried forward to offset income tax liabilities in future years. RCEC Data IRS data appear to show that the RCEC has been utilized more than previously estimated. A December 2023 estimate projected that the RCEC would cost $3.6 billion in FY2023. The new IRS data, released in August 2024, show that the RCEC reduced federal revenues by $6.3 billion in tax year 2023. These data do not account for late filer claims. Congressional Research Service https://crsreports.congress.gov IN12423 CRS INSIGHT Prepared for Members and Committees of Congress

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