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However, with the latest changes from the Inflation Reduction Act (IRA), you may need clarification to understand how these savings could apply to you.
Let’s look at the tax credits and rebates for these home improvements and more details on how the IRA fits into the picture of your potential savings.
Tax credits and rebates are financial incentives for homeowners who make energy-efficient home upgrades. These incentives are designed to offset the costs of the upgrades and encourage homeowners to make energy-efficient choices. The Internal Revenue Service (IRS) offers tax credits for energy-efficient home improvements, while rebates are typically available from utility companies, state and local governments, and non-profit organizations.
To be eligible for tax credits and rebates, the upgrades you make to your home must meet certain energy efficiency standards. The specific improvements that qualify for incentives may vary depending on the program but generally include energy-efficient appliances, HVAC systems, insulation, roofing, and windows.
The amount you can save with tax credits and rebates depends on the upgrades you make and the available incentives in your area. Tax credits are typically applied to your tax liability, reducing the amount of taxes you owe. For example, if you owe $5,000 in taxes and qualify for a $1,000 tax credit, the credit will reduce your tax liability to $4,000. Rebates, on the other hand, are paid directly to you and can be used to offset the costs of the upgrades.
The Residential Clean Energy Credit is among the most popular tax credits for energy-efficient home improvements. This credit “equals 30% of the costs of new, qualified clean energy property for your home” if you install it between 2022 and 2033. Eligible upgrades include windows, doors, roofing, and insulation—as well as specific HVAC systems and water heaters.
The Inflation Reduction Act introduced new tax credits starting January 1, 2023. These tax credits aim to encourage households to adopt cleaner energy consumption practices. By taking advantage of these credits, families can save a significant amount of money. Let’s look at a breakdown of these credits and rebates specific to home improvements.
If you make qualified energy-efficient improvements to your home after January 1, 2023, you may be eligible for a tax credit of up to $3,200. You can claim this credit for improvements made through 2032.
The credit is equal to 30% of certain qualified expenses, including:
The maximum credit you can claim each year depends on the type of expense:
To claim the energy-efficient home improvement credit, file Form 5695, Residential Energy Credits Part II, with your tax return. It is important to claim the credit for the tax year when you install—not just purchase—the property.
Are you considering making energy-efficient upgrades to your home? There’s never been a better time to make these improvements and take advantage of the available tax credits and rebates! At Gorjanc, we provide upgrades for central air conditioners, heat pumps, furnaces, water heaters, and electrical panels that qualify for tax credits and rebates.
Learn more about the available incentives and how to claim them.
Don’t regret calling the wrong company for heating, cooling, plumbing, or electrical services. Make the right choice and call Gorjanc Home Services at (216) 545-1776.
Gorjanc Home Services is Northeast Ohio’s Smart Choice for heating, cooling, plumbing, and electrical service since 1963.
OH Lic# 18275
(216) 464-4647
