Claim Your Energy Credits

New energy credits are available for energy efficient items installed in your home.

The Inflation Reduction Act of 2022 enhanced the energy credits available to individuals on improvements to their residence. Gone is the lifetime limit that we had through 2022.

Energy-Efficient Home Improvement Credits

• Increased the maximum credit from $500 per lifetime to $1,200 per year.

• Applies to property placed in service after Dec. 31, 2022, and extended the credit through Dec. 31, 2032.

• Credit is capped at the lesser of 30% of your cost or $1,200 total – across all improvements (except for heat pumps, which are separately capped at the lesser of 30% of your cost or $2,000).

• If your utility company offers a rebate for installing energy-efficient improvements, you’ll need to deduct that rebate from your cost before calculating your 30% tax credit.

• See below for a table of the specific calculations for each type of energy-efficient improvement. Note that the annual maximum credit of $1,200 applies across all categories combined (except heat pumps).

Energystar.gov has more information on the tax credits available.

Type of Improvement Credit Rate Max Annual Credit Qualifications
Windows 30% of cost $600 Energy star most efficient
Exterior Doors 30% of cost $250 per door; max of $500 total Energy star
Insulation 30% of cost $150 Meet criteria from International Energy Conservation Code
Heat pumps, biomass stoves and boilers 30% of cost $2,000, but does not count towards the combined annual max of $1,200.* Highest efficiency tier established by Consortium for Energy Efficiency
HVACs, water heaters, furnaces, boilers 30% of cost $600 Highest efficiency tier established by Consortium for Energy Efficiency
Upgrades to electric panel to at least 200 amps 30% of cost $600 Panel upgrade must be installed as part of and to enable other energy efficient improvement
Home energy audits 30% of cost $150 TBD

 

*For example, you could get $1,200 of credits from windows, doors, and insulation PLUS $2,000 for a heat pump

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Profile photo of Penny Wasem, CPA, CFP, PFS, owner of Lifetime Financial Planning Solutions in Lancaster, Ohio.

By Penny Wasem, CPA, CFP, PFS

Penny L. Wasem is the owner of Lifetime Financial Planning Solutions, LLC. A summa cum laude graduate of Ohio University, Penny earned a Bachelor of Business Administration with focus in accounting and mathematics. She serves on the board of The Fairfield Medical Center Foundation, is a member of the Investment Committee of The Fairfield County Foundation and has been active on many non-profit boards in the community. Penny lives in Lancaster with her husband Eric Hubbard and is parent to Clark and Olivia Hubbard.