Energy Efficient Tax Credits
Part of the Inflation Reduction Act passed in 2022, the Residential Clean Energy Credit allows taxpayers to claim 30% of the costs for improvements to their residences. This credit is available for property that is placed in service from 2022 through 2032. Taxpayers will use Form 5695 to figure out and claim the available residential energy credits.
Who Qualifies? For the tax year 2023, you may qualify if you made energy-saving improvements to your home in 2022. A home for purposes of this credit is defined as, “A home is where you lived in 2022 and can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.” Following the claiming of this credit, the taxpayer must reduce the basis of their home by the amount of any credit allowed.
Both credits allocate costs when the original installation of the improvement is completed, or with the reconstruction of your home when the original use of the home begins.
The Residential Clean Energy Credit is available for both existing homes and homes being constructed while the Energy Efficient Home Improvement Credit is only available for existing homes.
For more information regarding these tax credits, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc., at (618) 997-3436.