Homeowners have less than two months to take advantage of significant tax savings through two major energy improvement credits set to expire at the end of the year. In some cases, renters can also apply for the credits.
The Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit, both offering substantial tax reductions for energy-saving home upgrades, will expire on December 31.
Under these programs, homeowners can claim up to 30% of costs for various energy-efficient improvements, including:
- ENERGY STAR certified air conditioners
- Water heaters
- Insulation
- Exterior doors
- Windows
- Solar panel installations
Additionally, homeowners can receive tax deductions for professional home energy audits that provide recommendations for improving energy efficiency.
The Residential Clean Energy Credit specifically allows homeowners to deduct 30% of solar panel installation costs from their tax bill.
Making the most of available credits
With the December 31 deadline approaching, homeowners interested in these tax savings should begin planning their energy-efficient upgrades soon.
These improvements not only offer immediate tax benefits but can also lead to long-term savings on energy bills.
How to claim the credits
To claim either the Energy Efficient Home Improvement Credit or the Residential Clean Energy Credit, homeowners should keep detailed records of their purchases and installations.
These documents will be necessary when filing their tax returns.
Renters can benefit too. You may claim the residential clean energy credit for improvements to your main home, whether you own or rent it. The website explains: Your main home is generally where you live most of the time.
Other options for home energy improvements
Consumer Reports explains that although the federal tax credits are expiring, there are state utility programs still available to help you save on improvement projects. The Database of State Incentives and the incentive calculator from Rewiring America has databases you can search for more options. Those incentives reduce the cost of individual energy-efficient upgrades.