Rebates

If you’ve been researching insulation upgrades—or have paid any attention to the news lately—you’ve probably heard something about tax credits and rebates. And there’s a good reason for that: the 25C tax credits are a big deal.

Why? Because it’s one of the best home upgrade incentives in years for homeowners, and it provides those who want to upgrade insulation with a significant financial boost.

The downside? All these tax credits, rebates and paperwork can get very confusing.

The good news here is that our team knows a lot about energy efficiency, so we’re familiar with the paperwork that comes along with getting rebates and credits for your home upgrades.

So, we’re in the perfect position to unravel the 25C tax credit. Which—you guessed it! — is what follows.

We’re energy-efficiency experts, so this guide will give you what you need to know to cover the essentials. Bring financial questions to your tax professional!

What are the 25C tax credits (aka the home energy tax credits)?

Basically, the 25C tax credit is a way for the government to encourage energy efficiency by reducing the amount of taxes you owe if you install qualifying upgrades in your home.

How big will your energy-efficient tax credit be? Well, that depends. It could be as much as $3,200 in a single year, but the actual amount depends on what kind of upgrades you’re installing.

Confused? Don’t be.

Let’s break down the key facts about the energy tax credits:

  • Starting in 2023, the 25C energy efficiency tax credits will give you up to 30% back on the purchase and installation cost of qualified home upgrades like insulation (or other related energy efficiency tasks, such as energy audits).So by funding a qualifying home weatherization project that costs $3,000, you could get a credit of $900 to apply to the taxes you owe that year. Not bad.
  • The credit isn’t unlimited—it’s capped annually at $1,200 for upgrades like insulation or air sealing and $2,000 for heat pumps, etc. If you install insulation and a heat pump? You could get up to $3,200 back.
  • The credit is not refundable—which means it’s only for reducing the amount of taxes you owe. You won’t get money back as a tax refund. However...
  • The credit resets every year, and you can use the credit again! This is excellent news. If you use the 25C tax credit to upgrade insulation this year, you can use it again if you happen to move.
  • The credit is available until 2032. After that, the amount of the credit is expected to go down. If you’re thinking about making some energy-efficient upgrades, this is the decade to do it.
  • Is there an energy tax credit for 2022? Yes. But the credit is for a much smaller amount—it’s a lifetime credit with a max of $500.
  • By working with 1907 Insulation, we can help you navigate the paperwork and make the most of your 25C tax credit—and any other local rebates you may be eligible for.

Essentially, if you make energy upgrades, you can get some money back on your taxes. Pretty good deal.

Who is eligible for the 25C tax credits?

First, before we talk about which upgrades are eligible, let’s talk about whether you and your house are eligible.

To qualify for the 25C tax credit, you must meet certain criteria:

  • Be a taxpayer living in a home or apartment,
  • Purchase and/or install the upgrades,
  • The house must already exist (it can’t be a new build),
  • If you’re a landlord, you can’t use it for properties you don’t live in—which means you can’t use the credit to upgrade rental properties or Airbnb houses. However, tax credits for certain improvements are eligible for second homes.
  • The weatherization upgrades must meet certain efficiency guidelines (often denoted by the ENERGY STAR seal of approval).

All of this is straightforward, right?

Essentially, you must own the house and be living in it to be eligible. And you must install upgrades which make your house more efficient.

But there’s one other thing to call out here: In order to qualify for the credit, you need to owe some taxes in the foreseeable future.

Because this credit is nonrefundable, it only works by reducing the amount of taxes you owe. If you don’t expect to owe any taxes, you won’t be able to take advantage of this tax credit.

Which upgrades are eligible for the 2023 energy tax credits?

Weatherization upgrades keep your house from exchanging too much air with the outside. You may be able to claim your 25C credit for materials like:

Insulating and air sealing your attic can go a long way toward keeping conditioned air where it’s supposed to be.

Just remember that your weatherization supplies and insulation choices need to meet the Department of Energy’s recommended R-values for your climate zone to qualify for the credit. Most of Oklahoma is in Climate Zone 3 where it recommended to have at least an R-38 in the attic space. (Learn more about R-values here.)

How to apply for the 25C tax credits?

We won’t lie to you—getting the 25C properly credited to your taxes can be a bit of a process, and you’re going to want to call in your accountant or a tax pro. (We’re insulation experts, after all, not financial pros.)

But the basics are simple:

  • Step 1: Install qualifying upgrades to your home. (Double-check to be sure everything qualifies.)
  • Step 2: Keep all receipts and documentation for the upgrades you make to your home. Write exactly what was installed, who installed it, and how much it cost. Keep copies of everything. Put it all in one place! Trust us, it’ll make the process so much smoother when it comes time to file.
  • Step 3: Call in your accountant and let them know you plan to use the 25C tax credit on your taxes...they will appreciate the early notice!

At that point, your accountant will likely…

  1. Ask for information about the upgrades made to your home, including the type of improvement, the date it was placed in service, and the cost.
  2. File IRS Form 5695with your tax return.
  3. Deduct the amount of the credit from the taxes you owe.

A quick disclaimer, too: Only your accountant, and ultimately the US government, can determine if you’re eligible for the tax credits.

That’s why if you’re counting on the credit to reduce your tax burden, it’s crucial to call in a financial pro earlier rather than later—you don’t want any more headaches during tax season.

Local Utility Rebates

For most of our customers, either Edmond Utilities or Oklahoma Gas and Electric (“OG&E”) will be the utility provider. Certain qualifying customers may be eligible to receive up to a $500 rebate by upgrading attic insulation to R38 or higher. See our FAQ page for more information on R-values. The current rebate structure from OG&E is as follows:

Starting R-value Incentive
R0 – R4 $500
R5 – R14 $300
R15 – R22 $250

Other Resources for Tax Credits and Rebates

Use this link to find federal insulation rebates for your home. You can plug in your zip code to ENERGY Star’s Rebate Finder to learn more about the incentives available for homeowners. The U.S. Department of Energy’s DSIRE database is also a helpful resource.

Contact us today for your free estimate and we can help answer questions about the rebate process and tax credits. Please note that not all homes qualify for rebates and once the yearly funds OG&E has set aside are exhausted, they will not be available again until the following year.