Tax Credits

Homeowners may qualify for federal tax credits by installing energy-efficient products in their residences.

Inflation Reduction Act

Home Energy Performance-Based, Whole-House Rebates (HOMES)

• Under this program, grants are provided to state energy offices for the purposes of developing a whole-house energy saving retrofits rebate program. Rebates vary based on income-level, home type, and energy savings.
  
• Eligible Recipients of state rebates:
  ○ Homeowners
  ○ Aggregators
  
• Eligible uses:
  ○ Purchasing eligible equipment that significantly reduces energy consumption in a home or multi-family building
  
• Rebate levels:
  ○ Income is 80% Area Median Income or higher = 50% of cost
  ○ Income is 80% Area Median Income or lower = 80% of cost
  
• See the chart below for further details
  

Energy Efficient Home Improvement Credit

• Provides a tax credit for energy-efficiency improvements of residential homes
• Credit:
  ○ Credit amounts to 30% of cost, with limits for type of improvement and yearly total
  ○ Credit capped at $1,200 annually
  ○ $2,000 annually for heat pumps
• Eligible Recipients:
  ○ Homeowners
  ○ Renters (for certain improvements)
• See the chart below for further details

New Energy Efficient Homes Credit

• Provides a tax credit for construction of new energy efficient homes
• Credit Amounts
  ○ $2500 for new homes meeting Energy Star standards
  ○ $5000 for certified zero-energy ready homes
  ○ Multifamily Homes
        – $500 base amount per unit for Energy Star
        – $1000/unit for zero-energy ready
        – Bonus credit available for MFH – 5x the base amount if prevailing wage requirements are met.
• Eligible Recipients:
  ○ Homebuilders

This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.

You Can Claim:

• 30% of product cost
• $600  maximum amount credited

Exterior residential windows or skylights must meet the ENERGY STAR Most Efficient criteria to be eligible for the 25C Federal Tax Credit.

Follow these 3 steps to determine if the windows and/or skylights you purchased are eligible:

1. Use the ENERGY STAR Climate Zone Finder to determine your climate zone.
2. Identify the Certified Product Directory (CPD) number of the product(s) you purchased. See example label (to the right) to find the number (highlighted in yellow).
3. Search for your CPD number(s) in the NFRC Certified Product Directory: https://search.nfrc.org/search/search_cpdnum.aspx