Your Guide to the Energy Efficient Home Improvement Credit

💡The energy efficient home improvement credit is a non-refundable tax credit that covers modifications to your home's building envelope or heating and cooling equipment.

🏠The credit is 30% of the cost of components, excluding installation labor, for energy efficient building envelope improvements and high efficiency heating, cooling, and heat pump equipment.

💰There is an annual credit limit of $1,200, with specific limits for different items. Building envelope improvements must meet International Energy Conservation Code standards.

🌟The energy efficient home improvement credit can be claimed by all filing statuses, and there is no income limitation or phase out. The credit is claimed on Form 5695.

🕒Timing of improvements is important for maximum credit. Large expenditures can be spread over several years to maximize the annual credits allowed.

What does the energy efficient home improvement credit cover?

—The credit covers modifications to your home's building envelope, such as insulation and weather stripping, as well as high efficiency heating, cooling, and heat pump equipment.

What is the maximum credit amount for the energy efficient home improvement credit?

—The maximum credit amount is $1,200, with specific limits for different items such as doors, windows, and electrical work.

Who can claim the energy efficient home improvement credit?

—The credit can be claimed by all filing statuses, and there is no income limitation or phase out.

How do I claim the energy efficient home improvement credit?

—The credit is claimed on Form 5695, which should be filled out with the details of your qualifying expenses.

Can I claim the energy efficient home improvement credit for items installed during the construction of a new home?

—No, the credit cannot be claimed for qualifying items installed as part of a home's original construction.

00:00The energy efficient home improvement credit was introduced as part of the inflation reduction act.

00:22The credit is a non-refundable tax credit of 30% of the cost of components for energy efficient building envelope improvements and high efficiency heating, cooling, and heat pump equipment.

01:00The credit can be claimed by all filing statuses, and there is no income limitation or phase out.

02:26To claim the credit, you need to fill out Form 5695 with the details of your qualifying expenses.

04:32Timing of improvements is important for maximizing the credit, as large expenditures can be spread over several years.

05:45The credit cannot be claimed for items installed as part of a home's original construction.

06:26In the next video, solar panels and the residential clean energy credit will be discussed.