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California Tax Relief Programs in 2023:

Tax season is here, which can be a stressful time of year for everyone. Unfortunately, many of the Covid tax breaks have been reduced or removed for the year 2022. Still, there may be tax breaks that apply to you. As the April 18th deadline approaches, let’s take a moment to review California’s tax relief changes for 2023.

Clean Energy Credits

Electric Vehicle Tax Credit 

If you purchased a qualifying electric vehicle last year, you could receive a nonrefundable clean vehicle tax credit of up to $7,500. According to IRS.gov new electric vehicle owners may even be able to claim the credit on an EV purchased before 2022. We recommend that you check out their webpage for terms and conditions.

In order to qualify, the vehicle must have an external charging source, weigh less than fourteen thousand pounds, and be sold by an approved manufacturer. Take advantage of this opportunity while you can!

Energy Efficient Home Improvement Credit 

Many efficiency improvements made to your home are eligible for a tax credit of up to $3,200. Since Title 24 requires most of these upgrades already, it’s perfect for homeowners in California with newly renovated homes. Even the purchase of a home energy audit can qualify you for a tax credit. Click here to learn more about qualifying expenditures and how you can apply.

Financial Hardship Credits

Earned Income Tax Credit (EITC)

The EITC is available as a credit for low to middle-income households. Claiming a tax credit reduces how much you owe and may even result in a refund.

General Credits

Child Tax Credit (YCTC)

As of January 2022, the American Rescue Plan reverted the Child Tax Credit down to the same levels as in 2019. The max you can claim is up to $2,000 per child. Any dependent under 17 years old may qualify for the tax break on the IRS form 1040.

General Welfare and Disaster Relief Payments (State)

California residents can receive deductions for disaster relief or welfare payments. Circumstances associated with Covid do apply. Whether filing by yourself or with an expert, double-check to see if you can exclude these from your income.

Other Changes

Charitable Deductions

You are no longer able to file an additional charitable tax deduction if you opt to take a standard deduction. This amendment was made to the previous years’ Covid-related legislature. 

Paycheck Protection Program Deductions (PPP) 

Forgiven PPP loans are tax-exempt. 

California Tax Relief 2023

Isn’t it exciting to learn that you may be eligible for any number of tax breaks this year? Be sure to file any necessary amendments to your paperwork before April 18th. Good luck!

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