The Internal Revenue Service (IRS) has issued a reminder to taxpayers that certain energy-efficient updates to their homes may qualify them for home energy tax credits.
IRS reminds taxpayers of expanded home energy tax credits for energy-efficient improvements
The Inflation Reduction Act of 2022 expanded the credit amounts and types of qualifying expenses. Taxpayers who make energy improvements to a residence may be eligible for the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit for the year that the qualifying expenditures are made.
The credit equals 30% of certain qualified expenses that have been made for qualified energy efficiency improvements installed during the year. The credit is available only for qualifying expenditures to an existing home or for an addition or renovation of an existing home, and not for a newly constructed home.
Taxpayers who invest in energy improvements for their main home may qualify for an annual residential clean energy tax credit
Taxpayers are encouraged to review all requirements and qualifications at IRS.gov/homeenergy before making any purchases. Homeowners who improve their primary residence have the most opportunities to claim credit for qualifying expenses. Renters may also be able to claim credits, as well as owners of second homes used as residences. Landlords cannot claim this credit.
Taxpayers that make qualified energy-efficient improvements to their home after January 1, 2023, may qualify for a tax credit of up to $3,200 for the tax year that the improvements are made. Taxpayers can claim the credit using Form 5695, Residential Energy Credits when filing their tax returns. Taxpayers are encouraged to keep good records of purchases and expenses during the time the improvements are made to assist in claiming the applicable credit during tax filing season.
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