Rebates and Tax Credits

Energy Efficient Home Improvement Credit (25C)

The Inflation Reduction Act of 2022 (H.R. 5376) extends the Energy Efficient Home Improvement Credit (25C) through the end of 2032 and expands the credit to allow households to deduct 30% of the costs of eligible upgrades from their taxes while adding new qualified products and larger dollar maximums. IRA also eliminates the credit’s lifetime cap and makes 25C an annual credit, meaning eligible taxpayers can claim it every year for new improvements (but cannot carry the credit forward to future years).

• 25C is available now for qualifying upgrades placed in service on or after January 1, 2023. Consumers claim the credits when filling out their tax returns via IRS Form 5695, including any relevant product receipts.
• 25C expands the credit to allow households to deduct 30% of the costs of eligible upgrades from their taxes while adding new qualified products and larger dollar maximums.
• Up to $600 per item: breaker panel, insulation, fossil fuel systems (meeting elevated efficiency limits) with maximum of $1,200 tax credit.
• Heat pump water heaters, air source heat pumps, biomass stoves and boilers have a separate yearly credit limit of $2,000.
• In a single year, taxpayers may claim up to $3,200 in tax credits for combined upgrades, provided costs fall under each sub-limit.
• Can be claimed annually through 2032