Unlock tax savings with home energy credits: IRS update for 2024
Understanding IRS home energy credits
As we strive for more sustainable living, the IRS is offering incentives that could significantly reduce your tax bill.
Making certain energy-efficient upgrades to your home not only contributes to a healthier planet but can also provide substantial financial benefits through tax credits.
What you need to know about home energy credits
Overview of available credits
Taxpayers can benefit from two main types of credits for making their homes more energy-efficient:
- energy efficient home improvement credit
- residential clean energy credit
These credits apply to various installations and improvements, including solar panels, heat pumps, and energy-efficient windows and doors.
Eligibility for the credits
- Homeowners of primary residences stand to gain the most, with opportunities to claim credits for multiple improvements.
- Renters and second-home owners may also qualify for certain credits, though the options are more limited.
- NOTE! Landlords are generally not eligible for these credits.
Detailed credit information
Energy efficient home improvement credit
- Qualifying improvements: Includes exterior doors, windows, skylights, insulation, certain heating and cooling systems, and more.
- Credit amount: Up to 30% of the cost of qualified improvements, with a cap of $3,200 annually for specific upgrades.
Residential clean energy credit
- Qualifying technologies: Solar energy systems, wind turbines, geothermal heat pumps, and more.
- Credit amount: 30% of the cost of eligible installations, with no upper dollar limit, applicable through 2032.
How to claim these credits
Taxpayers should use Form 5695, residential energy credits to claim these benefits.
The form should be filed in the year the installation is completed. It’s crucial to maintain good records of all expenditures related to qualifying energy improvements.
Additional resources
For more detailed information on qualifying improvements and how to claim these credits, taxpayers are encouraged to visit the official IRS website.
Further guidance on energy-efficient upgrades can also be found on energy.gov, which outlines specific requirements and benefits for the tax years 2023-2032.