You might have heard about the Inflation Reduction Act, which was passed into law in August 2022.
Funnily enough, the law does very little to combat inflation.
That way, it’s possible for you to strategize your renovations to maximize your potential credits and rebates.
What Is the Energy Efficient Home Improvement Credit?
Starting in 2023, the Nonbusiness Energy Property Credit is getting a facelift.
Instead, there is an annual max of $1,200.
No Interest Til Almost 2027?
Some of these credits have caps, and each item has different criteria.
For example, Ellis himself is considering upgrading his central air conditioning system.
That said, the tax credit isnt the only way energy-efficient home improvements can save you money.
It tends to pay for itself over time, he says.
What Qualifies Under the Energy Efficient Home Improvement Credit?
The windows must meet Energy Stars Most Efficient standard to qualify.
Insulation
Insulating your home comes with no dollar cap!
Your insulation will have to meet International Energy Conservation Code standards from two years prior.
So for the 2023 tax year, youd want to see to it your insulation meets or exceeds2021 standards.
Heres where you’re able to get thespecs for 2023 requirements.
To qualify, currently your furnace or boiler must meet 2021 Energy Star standards.
Here are the standards forfurnacesandboilers.
Plus, the manufacturer has to specify that it can be used with up to 20% biofuel.
Starting in 2027, youll have to meet higher standards to claim this credit for your furnace or boiler.
This ones a little stickier, though.
It can only be used to reduce your tax liability to $0.
Dont See You Project on the List?
But the label your state uses may vary.
Find your states energy department to keep tabs on the latest news in your area.
So when you go in to make your purchase, youll need to bring paperwork verifying your income.
The max rebate you would be (federally) allowed to claim across all items will be $14,000.
Fun fact: Nobody knows!
Once these programs are up and running, there will be more concrete rules about double dipping.
She is a regular contributor to The Penny Hoarder.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
