Agency: Department of the Treasury
Description:
Tax credit of 30% for individuals implementing “qualified energy efficiency improvements” for certain “residential energy property expenditures” and home energy audits.
Bill Section:
13301
US Code:
26 USC 25C
New or Existing:
Existing
Potential Cost:
$12,451,000,000
Timeline:
2022-2032
Implementation Status/Rulemaking:
On August 4, 2023, the Internal Revenue Service issued Notice 2023-59 which announced forthcoming proposed regulations addressing the requirements for home energy audits with respect to the energy efficient home improvement credit under 25C: Source
On Dec. 29, 2023, the Internal Revenue Service issued Notice 2024-13 requesting comments on a proposed product identification number (PIN) requirement for the energy efficient home improvement credit: Source
TCS Notes:
Qualified Energy Efficiency Improvements includes such items as doors, windows, skylights, insulation, and air sealing materials. Items must be new and meet Energy Star or other efficiency related criteria.
Qualified Energy Property includes: Central air conditioners, Natural gas, propane, or oil water heaters, Natural gas, propane, or oil furnaces and hot water boilers, oil furnaces, oil hot water boilers, as well as the electrical components needed to support the residential property.
The maximum credit you can claim each year is: 1) $1,200 for energy property costs and certain energy efficient home improvements, with limits on doors ($250 per door and $500 total), windows ($600) and home energy audits ($150) and 2) $2,000 per year for qualified heat pumps, biomass stoves or biomass boilers
The credit has no lifetime dollar limit. You can claim the maximum annual credit every year that you make eligible improvements until 2033.
The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.