Maximizing Savings: A Comprehensive Guide to the 2023 Energy Tax Credits
If you enhance the energy efficiency of your home, you become eligible for tax credits covering a portion of qualifying expenses. The Inflation Reduction Act of 2022 expanded both the types of qualifying expenses and the amounts eligible for credits.
We are here to assist you in comparing these credits and determining whether they are applicable to expenses you've already incurred or for future improvements you're planning.
Who is eligible to claim these credits?
You have the option to claim either the Energy Efficient Home Improvement Credit or the Residential Energy Clean Property Credit in the year when you make qualifying improvements.
Homeowners who enhance their primary residence have ample opportunities to claim credits for qualifying expenses. Additionally, renters and owners of second homes used as residences may also be eligible to claim these credits. However, the credits are not available for improvements made to homes that are not used as residences.
Details of the Energy Efficient Home Improvement Credit:
Qualifying expenses may include:
• Exterior doors, windows, skylights, and insulation materials
• Central air conditioners, water heaters, furnaces, boilers, and heat pumps
• Biomass stoves and boilers
• Home energy audits
The credit amount is a percentage of the total improvement expenses in the year of installation:
• 2022: 30%, up to a lifetime maximum of $500
• 2023 through 2032: 30%, up to a maximum of $1,200 (heat pumps, biomass stoves, and boilers have a separate annual credit limit of $2,000), no lifetime limit
For more details on the Energy Efficient Home Improvement Credit, visit Energy Efficient Home Improvement
Details of the Residential Clean Energy Credit:
Qualifying expenses may include:
• Solar, wind, and geothermal power generation
• Solar water heaters
• Fuel cells
• Battery storage (beginning in 2023)
The credit amount is a percentage of the total improvement expenses in the year of installation:
• 2022 to 2032: 30%, no annual maximum or lifetime limit
• 2033: 26%, no annual maximum or lifetime limit
• 2034: 22%, no annual maximum or lifetime limit
For more details on the Residential Clean Energy Credit, visit Residential Clean Energy Credit
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