The IRS is reminding taxpayers about the benefits of making energy-efficient updates to their homes, as they can qualify for home energy credits. These credits have been expanded by the Inflation Reduction Act of 2022, providing significant incentives for homeowners to invest in energy improvements.
Homeowners can claim the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit in the year they make qualifying expenditures. This applies to primary residence owners, renters, and second-home owners who use them as residences. However, landlords are not eligible for these credits.
For qualified energy-efficient improvements made after January 1, 2023, homeowners may qualify for a tax credit of up to $3,200. The credit equals 30% of certain qualified expenses, including exterior doors, windows, insulation, heating systems, and more.
Additionally, taxpayers investing in clean energy improvements for their main home can qualify for an annual residential clean energy tax credit. This credit covers 30% of the costs for new qualified clean energy property installed from 2022 through 2032, such as solar panels, wind turbines, and geothermal heat pumps.
To claim these credits, taxpayers must use Form 5695, Residential Energy Credits, when filing their tax return. It is important to review the requirements and keep thorough records of purchases and expenses to ensure all applicable credits can be claimed during tax filing season.