If you make energy improvements to your home, tax credits are available for a portion of qualifying expenses. The credit amounts and types of qualifying expenses were expanded by the Inflation Reduction Act of 2022.
Who Can Claim the Credits
You can claim the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit for the year when you purchase and install qualifying improvements.
Homeowners who improve their primary residence will find the most opportunities to claim a credit for qualifying expenses. Renters may also be able to claim credits, as well as owners of second homes used as residences.
The credits are never available for improvements made to homes that you don’t use as a residence.
Energy Efficient Home Improvement Credits
Qualifying Credit Amounts and Expenses
These expenses may qualify if they meet requirements detailed on energy.gov:
- Exterior doors, windows, skylights and insulation materials
- Central air conditioners, water heaters, furnaces, boilers and heat pumps
- Biomass stoves and boilers
- Home energy audits
The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:
- 2022: 30%, up to a lifetime maximum of $500
- 2023 through 2032: 30%, up to a maximum of $1,200 (water heaters, heat pumps, biomass stoves, and boilers have a separate annual credit limit of $2,000), no lifetime limit
*For 2022, biomass stoves and boilers are treated as a Residential Clean Energy Credit with no lifetime maximum.
Get details on the Energy Efficient Home Improvement Credit.
How to Claim the Credit
File Form 5695, Residential Energy Credits Part II, with your tax return. You must claim the credit for the tax year when the improvementis installed (not purchased).
Residential Clean Energy Credit
Qualifying Credit Amounts and Expenses
These expenses may qualify if they meet requirements detailed on energy.gov:
- Solar, wind and geothermal power generation
- Solar water heaters
- Fuel cells
- Battery storage (beginning in 2023)
The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:
- 2022 to 2032: 30%, no annual maximum or lifetime limit
- 2033: 26%, no annual maximum or lifetime limit
- 2034: 22%, no annual maximum or lifetime limit
How to Claim the Credit
File Form 5695, Residential Energy Credits Part I, with your tax return to claim the credit. You must claim the credit for the tax year when the improvementis installed (not purchased).