The Inflation Reduction Act was passed in 2022 allowing energy-efficient federal tax credits and deductions. If you make qualified energy-efficient improvements to your home after January 1, 2023, you may qualify for a tax credit of up to $3,200. These federal tax credits will be available through 2032.
Residential Clean Electricity Products
- Solar panels for electricity from a provider in your area.
- Home backup power battery storage with a capacity of 3kWh or greater.
Heating, Cooling, and Water Heating
- Electric heat pumps, electric heat pump water heaters, and central air conditioners that meet or exceed the specific efficiency tiers established by the Consortium for Energy Efficiency.
- Solar water heating products are certified for performance by the Solar Rating Certification Corporation or a comparable entity endorsed by the state government where the product is installed.
Other Energy-Efficiency Upgrades
- Panelboards, sub-panel boards, branch circuits, or feeders are installed according to the National Electrical Code and have a load capacity of 200 amps or more.
- Insulation materials and systems that meet International Energy Conservation Code standards.
- Exterior windows that meet Energy Star’s Most Efficient requirements.
As you prepare to file your taxes, don’t leave any of these credits on the table. To claim the tax credits, you can file Form 5695, Residential Energy Credits Part II, with your tax return 123. You must claim the credit for the tax year when the property is installed.
Please note that this information is provided for informational purposes only. It is not intended to substitute for expert advice from a professional tax/financial planner or the Internal Revenue Service (IRS).