This week we recognize small business everywhere! To help celebrate, the IRS has provided advice to new businesses so they may take advantage of tax benefits including credits for things like investing in solar power and energy efficiency improvements and vehicles, as well as employee retention credits.
The Inflation Reduction Act (IRA), enacted last summer, includes provisions that can save small business owners money on energy costs. For example:
- Small businesses can receive a tax credit covering 30% of the cost of switching over to low-cost solar power, lowering operating costs and protecting against volatile energy prices.
- Small business building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
- Through the Clean Commercial Vehicle Credit, small businesses that use vehicles such as trucks and vans can benefit from tax credits up to 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models that meet applicable requirements. There is no limit on the number of Clean Commercial Vehicle credits a business can claim.
Keep in mind, these credits are nonrefundable, so businesses can’t get back more on the credit than they owe in taxes.
The IRS also reminds small businesses about important reporting changes. To review all of the tax savings and reporting changes, click here.