Do You Like Money? Don't Forget to Claim Tax Credits On Energy Improvements Now
Date - 01/16/2023
Tax credits = money
If you’re an organized person, you might be just about ready to file your 2022 taxes. You may be just starting to pull together your forms and reports with your own deadline of March 1st. Even if you’re a “hot mess” and wait until the very last hour to mail your taxes, you’re probably hoping for a refund.
Because who doesn’t like money?
If you want to increase your odds of getting a refund - or at the very least, lower the amount you owe – you need to claim tax credits now for any energy efficient improvements you’ve made in the past year.
Are you eligible for the Energy Efficient Home Improvement Credit?
Homeowners get tax credits for all or any of four different categories of improvements that made their homes more energy efficient.
ONE: Did you improve the “envelope” of your house?
The “envelope” of a building is the external structure that keeps us separated from the weather. The roof, foundation, walls, windows, and doors are all considered part of the “envelope,” metaphorically “sealing” us safely inside.
- New exterior windows or skylights
- Claim 30% of the cost up to $600.
- New exterior doors
- Claim 30% of the cost up to $250 per door with a maximum total of $500.
- New insulation materials or systems
- Claim 30% of costs
- New air sealing materials or systems
- Claim 30% of costs
TWO: Did your home have an energy audit?
An energy audit is where a trained professional from an HVAC company comes into your home and checks for places where air can get in or out, like around ducts, chimneys, doors, windows, and electrical outlets. They evaluate the number of external openings, the amount of insulation, and the state of existing seals.
Energy audits can help homeowners find problems, repair them, and save up to 30% on monthly utility bills.
- Energy audit by certified auditor on a dwelling that includes an inspection and a written report
- Claim 30% of costs up to $150
THREE: Did you improve your “residential energy property?”
“Residential energy property” is just a fancy name for the installed systems that belong to the house and use energy. If you installed any of these, you’ll be able to claim a tax credit:
- Central air conditioner
- Water heaters: natural gas, propane, or oil
- Furnaces or water boilers: natural gas, propane or oil
- Improvements to or replacements of panelboards, sub-panelboards, branch circuits, or feeders installed with the building envelope components
- Claim 30% of costs, including labor, up to $600 each unit
FOUR: Did you add a heat pump, biomass stove, and/or biomass boiler?
Heat pumps transfer either heat or cold without the need for fossil fuels because they work solely on electricity. Biomass stoves and boilers operate on renewable energy sources like wood pellets, crop debris, or scrap wood.
- Heat pump water heaters: electric or natural gas
- Heat pump: electric or natural gas
- Biomass stoves and boilers
Good news if you like money
Whether your old system conked out last year and you had it replaced…
or
Whether you purposely chose to replace your existing system last year before the pricing increased this year….
or
Whether you upgraded your system in 2022 due to your concerns about your carbon footprint and your skyrocketing utility bill,
You’ll get a tax credit now!
What’s the maximum you can claim?
If you made “envelope” improvements to your home, the maximum you can claim for everything in that category is a total of $1200.
If you added a heat pump system or a biomass stove or boiler, you could claim up to $2000.
If you did the whole shebang, the maximum you could claim would be a whopping $3200.
Even if you did just ONE of these improvements, you’ll be better off with a small tax credit than you would without it.
More good news if you like money!
These 30% tax credits on energy efficiency improvements were originally scheduled to start phasing out with the amount of the discounts decreasing each year after 2022. However, the tax credits will be in effect this year, too and are extended until January 1, 2033.
Any time in the next decade that you make an improvement to your home’s basic systems, you’ll be guaranteed to receive a tax credit for 30% of the costs.
Call Air Therm
Questions about the system we installed for you last year? Questions about how we can help you lower your energy bills this year? Call Air Therm. We treat you like our grandma!