Homeowners in America have a chance to get money back from their home improvement projects through tax breaks. According to Energy Star, several federal tax credits can be claimed through the end of 2032 thanks to the Inflation Reduction Act, which allows for up to $10,000 in credits and rebates.
Homeowners who make energy-efficient upgrades to their homes are eligible for the cash. However, the equipment installed must be new and the credits won’t apply to new construction. Homes that are qualified for the tax credit include houseboats, houses, mobile homes, condominiums, cooperative apartments, and manufactured homes. There are no income limits since there is a cap on the amount that can be claimed.
According to Energy Star, the tax credits will match the full cost of the eligible equipment and be capped at a certain limit. The items that qualify for these tax credits include:
- Air source heat pumps: maximum credit of $2,000
- Central air conditioner: maximum credit of $600
- Natural gas and propane hot water boilers can get a maximum credit of $600
- Biomass stoves and boilers: maximum credit of $2,000
- For natural gas and oil furnaces: maximum credit of $600
- Heat pump water heaters: maximum credit of $200
- Natural gas and propane hot water boilers can qualify for a tax credit of up to $600.
- An electric panel upgrade: maximum credit of $600
- Exterior windows and skylights: maximum credit of $600
- For exterior doors, the maximum tax credit that can be claimed is $250 for each door or a maximum of $500 for all doors in a given year
- Insulation materials: maximum credit of $1,200
Homeowners have a yearly limit of $1,200 for these tax credits unless the initial tax credit is above this amount, such as for biomass stoves and air-source heat pumps. For purchases made between 2005 and 2021, the maximum credit limit is $500, but if this amount has already been claimed, the taxpayer will not be able to claim it again. However, purchases made in 2009 or 2010 can be claimed for a combined limit of $1,500.
In conclusion, this is a great opportunity for homeowners to get money back on energy-efficient upgrades to their homes. With a wide range of eligible items and no income limits, it’s worth checking to see if any of your recent home improvement projects qualify for these tax credits.