Modified and Extended Residential Clean Energy Credit

Tax time is right around the corner and Charles Schwab has just published a helpful article to help navigate the available tax credits for clean energy and energy efficient home improvements. It’s worth pointing out that you can claim up to 30% of the value of qualified improvements with no limit!

That said, we’re at the peak. The annual tax credit will decline to 26% in 2033 and 22% in 2034. Also, the value of the credit cannot exceed the value of the taxes owed, but you can carry forward the excess amount for use in future tax years.

Energy-efficient home improvement credit

• Annual tax credit: 30% of qualified improvements, up to $3,200
• Qualifications: existing homes only
• Expires: January 1, 2033

Includes:

• Doors: limited to $250 per door, $500 in total
• Windows: limited to $600 in total
• Heat pumps and biomass boilers and stoves: limited to $2,000 in total
• Home energy audit: limited to $150 in total

Residential clean energy credit

• Annual tax credit: up to 30% of qualified improvements with no maximum (Limit will decline to 26% in 2033 and 22% in 2034. Credit cannot exceed taxes owed, but you can carry forward the excess amount for use in future tax years.)
• Qualifications: primary residence, whether owned or rented, and second home if not used as rental; properties must be in the U.S.
• Expires: December 31, 2034

Includes:

• Solar water heaters
• Solar electric panels
• Wind turbines
• Battery storage technology
• Geothermal heat pumps
• Fuel cells (primary residence only) (Credit is limited to $500 per each half-kilowatt of capacity or up to $1,667 per half-kilowatt for multiperson households.)

Federal Income Tax Credit

Through 2032, federal income tax credits are available to homeowners, that will allow up to $3,200 annually to lower the cost of energy efficient home upgrades by up to 30 percent. For details on the entirety of Federal Tax Credits for Energy Efficiency – see this article on EnergyStar.