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:
- Insulation
- Water Heaters
- Heat Pumps
- Biomass Stove/Boilers
- Windows/Skylights
- Exterior Doors
- Central Air Conditioners
- Natural Gas, Oil, Propane Water Heaters
- Natural Gas, Oil, Propane Furnaces/Boilers
- Electric Panel Upgrades
- Home Energy Audits
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.