What is the Energy Efficient Home Upgrade Tax Credit? In a nutshell, this is a credit that can be applied to your federal income taxes. Qualified candidates can receive a credit of up to $3,200 for approved home improvements, and this credit is in effect from January 1, 2023, to the year 2032. This credit can be claimed every year until the credit expires in 2032.

Which Home Improvements Qualify?

Which home improvements qualify for the Energy Efficient Home Improvement Tax Credit? As the name suggests, these home improvements should focus on increasing the energy efficiency of the home. Here’s a breakdown:

Exterior Windows and Skylights: Windows and skylights that meet ENERGY STAR requirements qualify for a $600 total credit.
Exterior Doors: Doors that meet ENERGY STAR requirements qualify for a $250 credit per door, and a maximum credit of $500 for multiple doors.
Heat Pumps, Biomass Stoves, and Biomass Boilers: A $2,000 credit applies to this upgrade.
Insulation: Insulation and air sealing materials that meet the current IECC standard qualify for a credit limit of $1,200.
Home Energy Audits: Have your home inspected for energy efficiency and apply a $150 credit to the audit.

Additional systems that qualify for the tax credit include:

Central Air Conditioners
Natural Gas, Propane, or Oil Water Heaters

All materials used to make the home improvement must meet the energy efficiency requirements, and they must be new. No used materials or systems qualify for the tax credit.

How Do You Claim the Energy Efficient Home Improvement Credit?

Before applying for the tax credit, make sure that you qualify. You can qualify if you are a United States citizen, and if you are making energy efficient updates to your primary residence. You cannot claim the credit if you are a landlord. If you qualify, then you must complete a Form 5695, Residential Energy Credit form with your tax return to claim the credit. This credit must be applied to the year when the products were installed. If they were purchased but not installed, then the credit does not apply.

Do you want to learn more or get started on your energy efficient home remodel? Contact Thiel’s Home Solutions today. We will be happy to provide you with a remodeling cost estimate for: