Recently enacted legislation provides tax breaks for energy-efficient home improvements

People that are planning to make their home more enery-efficient could be in line for a valuable tax break. Better yet, the tax benefit won’t expire for 10 years, so they will be able so spread out their projects.

The Inflation Reduction Act, a $739 billion legislative package signed into law in August, includes a tax credit worth up to $1.200 a year to defray the cost of installing qualified windows, furnaces and other energy-saving home improvements.

The Energy Efficient Home Improvement Credit, which goes into effect in 2023, will allow you to claim 30% of the cost of energy-efficient home improvements (up to $1.200) each year through 2032.

The Inflation Reduction Act also provides a more generous tax credit for more expensive energy efficient home improvements. For example, if you install an electric or natural gas heat pump, which is more efficient than traditional HVAC systems, you can claim a credit of 30% of the cost, up to $2.000.

Evenmore, if you are planning to go green in a big way, another provision of the Inflation Reduction Act will help you offset those costs.

The Residential Clean Energy Credit provides a tax credit worth 30% of the cost of installing residential panels.

Systems that use wind, geothermal or fuel-cell power to produce electricity, heat water or regulate the temperature in your home also qualify for this credit.

For example, if someone spends $20.000 installing solar panels in 2023, you are eligible for a tax credit of $6.000.