Tax Credits

Federal Tax Credits for Energy-Efficient Upgrades

Through the Inflation Reduction Act of 2022, homeowners can access significant tax credits for implementing energy-efficient solutions in their homes. These incentives aim to reduce energy bills, support the environment, and make energy-efficient upgrades more affordable.

Available Tax Credits

1. Residential Clean Energy Credit: Offers a 30% tax credit for clean energy equipment like solar panels, wind turbines, geothermal heat pumps, and battery storage systems. The credit value will decrease after 2032, stepping down to 26% and 22% in subsequent years.
2. Energy Efficiency Home Improvement Credit: Homeowners can claim 30% of costs up to specific limits for certain improvements, including air-source heat pumps, biomass stoves, and HVAC systems.

Qualifying Products

• Heating and Cooling: Products like heat pumps, central air conditioners, and biomass stoves.
• Water Heaters: Includes heat pump water heaters and solar water heaters.
• Home Envelope Improvements: Insulation, windows, doors, and skylights that meet ENERGY STAR standards.

How to Claim

To claim these credits, homeowners must use IRS Form 5695 during their annual tax filings. Detailed guidance on claiming these credits is provided by the IRS.

Additional Tips

• Always look for ENERGY STAR certified products to ensure eligibility.
• Consider scheduling a home energy audit to maximize efficiency and ensure that all potential improvements are identified.

For a deeper understanding and specific instructions, homeowners are advised to visit the ENERGY STAR website or consult with a tax professional.