About the Energy Efficient Home Credit

Our clients deserve to understand all of the tax rebates, credits, and incentives for which they qualify. Clients who purchased their home after December 31, 2022 may qualify for the Energy Efficient Home Credit up to $3,200.

The tax credit amounts to 30% of qualified expenses (up to $3,200), including:

• Qualified energy efficiency improvements;
• Residential energy property expenses; and
• Home energy audits.

The tax credit has no lifetime dollar limit, meaning filers can claim it each year they make eligible improvements. However, there are annual limits on allowable credit for qualifying homes placed in service after December 31, 2022 and before January 1, 2033.

Those annual limits are:

• $1,200 for energy property costs and certain energy efficient home improvements, with limits on doors ($250 per door and $500 total), windows ($600), and home energy audits ($150); and
• $2,000 per year for qualified heat pumps, biomass stoves, or biomass boilers.

The credit is nonrefundable, meaning homeowners cannot get back more on the credit than they owe in taxes. They also cannot apply excess credit to future tax years.

To qualify, the home must be the homeowner's primary residence, an existing property (not a new build), and located in the United States.

Learn more about this tax credit on the IRS website here.

Tax Credit for Builders

Are any of your clients home builders or renovators? The updated IRS guidance states that home builders who construct, reconstruct, or rehabilitate energy-efficient homes might be eligible for a tax credit of up to $5,000 per home. Specifics can be found here in this IRS release.

The High-Efficiency Electric Home Rebate program

The High-Efficiency Electric Home Rebate program, which provides rebates to low-income households with energy-efficient appliances and improvements, is administered at the state level. Clients and contacts can learn more about the requirements for their state on the NASEO website here.