after the work is complete, how do you apply for the credit?
The Inflation Reduction Act (IRA) is directing an unprecedented $369 billion toward energy saving initiatives through tax credits. These tax credits will have numerous benefits including improved energy efficiency, reduced energy bills, and improved home comfort and indoor air quality.
The IRA tax credits can be combined with local incentives for even bigger savings!
IRA tax credits include the following:
- Residential retrofit incentives
- New and retrofit commercial incentives
- New home incentives
- Efficient building envelopes through building codes
- Tax credit amount applies from January 1, 2023 to December 31, 2032
- 30% of insulation and air sealing materials up to $1,200 (per year)
- Credit available on a yearly basis
- Home energy audits covered up to $150
new home incentives
residential retrofit incentives
Principal Residence Owners
- Must be an existing home & your principal residence. New construction and rentals do not apply.
A principal residence is the home where you live most of the time. The home must be in the United States. It can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home.
It’s rather simple to get the tax credit. Get the insulation work done during the year and file IRS Form 5695 “Residential Energy Credits” the following year when you file your taxes. If you have taken this tax credit in tax years 2022 and before, that’s okay - - you are not excluded from qualifying for the new 2023 tax credit. The only way anyone can get the credit is by filing a tax return and claiming the credit.
what products and applications are eligible?
There are many components to this act and some portions of the act are still being determined by each state. There are many ways you can save and tax credits are subject to program changes. Our team is happy to answer questions. Contact our office to discuss your project and how tax credits can help.
- Builder credit of $2,500 for single family homes that meet ENERGY STAR Version 3.2 and meet 2021 IECC prescriptive envelope standards
- Builder credit of $5,000 for homes that meet DOE Zero Energy Ready Home standard
- Builder credit of $500 / $1,000 for multifamily units, with incentives increasing to $2,500 / $5,000 when meeting prevailing wage requirements
- Enhanced credit amount applies from January 1,2023 to December 31, 2032
Insulation Tax Credits are available
who can use this credit?
Typical bulk insulation products can qualify, such as batt insulation, rolls, blow-in fibers, rigid boards, expanding spray foam insulation, and pour-in-place. Products that air seal (reduce air leaks) can also qualify.
The following applications qualify:
- Existing Insulation and debris removal
- Attic and/or Crawl Space Air Sealing
- New Attic Insulation (Spray Foam or Fiberglass Batt insulation)
- New Crawl Space Insulation (Spray Foam or Fiberglass Batt insulation)