The Federal Energy Tax Credit is a great way to save money on energy-efficient home improvements. It offers a 30% credit for certain qualifying expenses incurred by a taxpayer on energy-efficient residential properties. This credit is limited to 30% of the qualifying expenses incurred by the property put into service in a given year. The Inflation Reduction Act expanded and modified existing energy credit until 2034, modified the applicable percentage credit rates and added battery storage technology as an eligible expense.
This means that you may be eligible for a home improvement tax credit that saves energy up to 30% of the cost, including installation, with no maximum limit. However, the value of the tax credit is expected to decrease over time. External solar panels or solar panels that are not directly in the taxpayer's home could still qualify for the federal residential solar tax credit under some circumstances. Improvements such as the installation of heat pumps, heat pump water heaters, insulation, doors and windows, as well as improvements to electrical panels, home energy audits and more are all covered by this tax credit and can help families save money on their monthly energy bills for years to come. It's important to note that this tax credit is only available for certain qualifying expenses. It's important to do your research and make sure that you are eligible for this tax credit before making any purchases or investments.
Additionally, it's important to keep track of all your expenses so that you can take advantage of this tax credit when filing your taxes.