How The Inflation Reduction Act Can Help Make Your Home More Comfortable While Saving You Money
A new year is here, which means new home improvement projects. If you are planning to make improvements to your home that will improve the overall comfort levels of your home while making it energy efficient, then you might be able to save some money. The Inflation Reduction Act was signed into law in 2022 to address climate change. Which helps existing homeowners, businesses, and contractors when they are making improvements to their home, business, or building new homes.
Savings For Homeowners
New federal income tax credits are available through 2032. These credits provide up to $3,200 annually to lower the cost of energy-efficient home upgrades by up to thirty percent. Improvements such as installing heat pumps, heat pump water heaters, insulation, doors, and windows, as well as electrical panel upgrades, home energy audits, and more, are covered by the tax credits and can help families save money on their monthly energy bills for years to come.
In addition to the energy efficiency credits, homeowners can also take advantage of the modified and extended Residential Clean Energy credit, which provides a thirty percent income tax credit for clean energy equipment, such as rooftop solar, wind energy, geothermal heat pumps and battery storage through 2032, stepping down to 22 percent for 2033 and 2034.
Savings For Contractors
The Inflation Reduction Act of 2022 updates and extends the Section 45L Tax Credit for Energy Efficient New Homes. For homes and units acquired on or after January 1, 2023, the base-level tax credit for home builders is specifically tied to ENERGY STAR certification for single-family, manufactured, and multifamily homes. This tax credit has been extended through 2032.
Savings For Commercial Building Owners
The Inflation Reduction Act of 2022 extends and expands the energy-efficient commercial buildings deduction that was made permanent under Section 179D in 2021. Buildings that increase their energy efficiency by at least twenty-five percent will be able to claim this deduction, with bonuses for higher efficiency improvements.
Energy efficiency tax credits for improvements made in 2022
The federal tax credits for energy efficiency were extended as part of the Inflation Reduction Act (IRA) of 2022. So, if you made any qualifying home improvements to your primary residence after December 31, 2021, you may be eligible to claim them on your taxes when you file for 2022.
If you are a homeowner, contractor, or commercial building owner and are looking to see if you qualify for any of the above click one of the links below to start the process to see if you can potentially save on your taxes.