Many taxpayers are familiar with the Nonbusiness Energy Property Credit that has been a part of our tax code for many years. This allowed for a 10% credit for qualified energy efficient improvements up to a $500 combined limit for all years since its enactment. This credit was still in effect for 2022.
The Inflation Reduction Act of 2022 made significant changes to this credit for expenditures made from 1/1/2023 to 12/31/2032. The credit increases to 30% and now applies to any residence in the US, including vacation homes. Instead of a $500 lifetime limit, a $1200 annual limit now applies. Qualified improvements include windows, skylights, exterior doors, heat pumps, water heaters, central air, wood stoves, and even energy audits. Contact us for more information.