Energy efficiency tax credits for homeowners
Courtesy: Energy Star®
As part of the Inflation Reduction Act (IRA) of 2022, federal tax credits for energy efficient home upgrades have been increased and extended until 2032.
This not only means that you may be eligible to claim credit for qualifying home improvements on your 2022 federal tax return, but you can also plan to maximize your savings on home improvements in the future.
With the new tax credits that are available starting this year, you can save up to $3,200 a year on energy-saving upgrades for your home—including projects like upgrading to super-efficient heat pump heating/cooling and water heating.
Combined with available utility rebates, these incentives could significantly reduce the cost of making impactful energy efficient upgrades for your home.
A wide range of Energy Star certified products are eligible for income tax credits including equipment and products for your home, as well as improvements to your home’s envelope or exterior—such as windows, doors, and insulation.
In fact, most elements of an Energy Star home upgrade, which is designed to deliver significant savings while helping you transition your home to the clean energy future are eligible.
Choosing products that earn the Energy Star label provides the added confidence that comes with independent certification of promised energy savings.
To learn more about the new tax credits, visit energystar.gov/taxcredits. Additionally, renewable energy tax credits have also been extended and will be available through the end of 2023. These include incentives for geothermal heat pumps, residential wind turbines, solar energy systems, and fuel cells.
How to apply the 2022 federal tax credits for energy efficient upgrades
In order to apply any qualifying tax credits on your 2022 tax return, you’ll want to download and complete the 2022 version of this worksheet provided by the Internal Revenue Service (IRS): IRS Form 5695: Residential Energy Credits. If you have questions during this process, contact your tax preparer or the IRS for more information.
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