Here’s some good news! The federal tax credits for energy efficiency were extended as part of the Inflation Reduction Act (IRA) of 2022. So, if you made any qualifying home improvements to your primary residence after December 31, 2021, you may be eligible to claim them on your taxes when you file for 2022.
Looking for the ENERGY STAR label makes it easy to identify products for your home that save energy, save money, and help protect the climate. Here are the highlights of ENERGY STAR certified equipment that is eligible for the tax credits.
Your home’s envelope includes the outer walls, windows, doors, and other openings. Upgrading your home’s envelope can improve the efficiency of your home and can qualify for the following tax credits:
Here’s the worksheet you’ll need to apply the tax credits when you file your tax return: IRS Form 5695: Residential Energy Credits. If you have questions, contact your tax preparer or the Internal Revenue Service (IRS) for more information. The Renewable Energy tax credits have also been extended and now will be available through the end of 2023. These include incentives for Geothermal Heat Pumps, Residential Wind Turbines, Solar Energy Systems, and Fuel Cells.
Starting January 1, 2023, new federal tax credits will be in place for 10 years – through 2032. Also, while the tax credit amount is mostly limited to 30% of the project cost, the previous lifetime cap of $500 has been changed to an annual cap of either $1,200 to $2,000 depending on the efficiency improvements you make. This means you will be able to claim credit for more projects, especially if they are spread out over multiple years.
The Energy Efficiency Home Improvement credits will be for products such as:
Make sure to bookmark ENERGY STAR’s page on Federal Tax Credits for more information and updates that may be helpful as you plan your next energy efficiency home improvement project!