The passing of the Inflation Reduction Act by Congress has created new opportunities for homeowners to invest in clean energy and reduce their carbon footprint. The act expands residential energy credits for purchases made this year. Because of this, you will claim the credit on your 2023 taxes.
The old Residential Energy Credit had a lifetime limit of $500. Many taxpayers maxed out this credit. Fortunately, the new law fixes this by providing a 30% unlimited credit on wind and solar. In addition, a yearly credit of up to $3,200 is available for other purchases.
Credit For Wind and Solar
Wind and solar are more affordable than ever. Costs for home systems have been dropping and the tax credits have become more generous. The energy credit will cover 30% of the labor and equipment costs. Consult your tax advisor for details on what is covered and how the credit is calculated.
To find a good company to help install a system, contact Sustainable Berea. Sustainable Berea is a local group of individuals dedicated to improving the environment. Consequently, they have first-hand experience with contracts in our area.
Credit For Energy Efficiency
You can also claim the energy credit for purchasing energy-efficient furnaces, air conditioners, or water heaters. Note: You will need to ensure these items satisfy certain energy efficiency requirements. Most manufacturers will let you know if they meet the requirements, if not you can look up the requirement here. Other items that qualify for the credits are heat pumps and biomass stoves.
Additionally, some home improvements may qualify for the credit. New doors, windows, or even insulation can qualify provided they meet the energy efficiency requirements.
Other Changes
Another change is the inclusion of home energy audits. The credit covers 30% of the cost to have your home assessed. An assessment can help you determine how much energy your home uses, and where your home is inefficient. Equally important, it identifies the problem areas and fixes you should prioritize to save energy and improve the comfort of your home.
This expansion of credits is a significant step towards a greener future. It provides a financial incentive for homeowners to invest in clean energy technology, reducing their energy bills, and significantly reducing their carbon footprint.
This Act is a step in the right direction. Moreover, it’s a move that will have a positive impact on the environment and the economy, and it’s a step towards a more sustainable future for homeowners and the nation.
