There are many tax benefits to going green, and they can help you save money while also helping the environment. Here are some of the tax benefits you can take advantage of when you make your home more energy-efficient:
You may qualify for an annual residential clean energy tax credit of 30% of the costs for newly installed property from 2022 to 2032. This credit applies to a new or existing home in the US where you live most of the year. It is not applicable to landlords or if you don't live there. You can carry forward any excess credit to apply to reduce tax owed in future years. The credit does not include interest paid, including loan origination fees.
To maximize your payback, you can spread out the improvements. For example, you can start with an energy audit and improve your home's envelope, which has a maximum credit of $1,200. You can then upgrade your heating and cooling systems, which has a maximum credit of $3,200 per year. You can also replace your windows, doors, and install new heat and water pumps.
This has a maximum credit of $3,100.
You can receive a tax credit of 30% of the product costs for energy-efficient windows and doors. This credit has a maximum of $600 for windows and $500 per taxable year for doors.
This credit is not applicable to landlords or if you don't live in the home.
You can receive a tax credit of 30% of the project costs for heat and water pumps, up to $2,000.
This credit is not applicable to landlords or if you don't live in the home.