Frequently asked questions about energy efficient home improvements and residential clean energy property credits - Energy efficient home improvement credit: Qualifying expenditures and credit amount

Updated FAQs were released to the public in Fact Sheet 2024-15 PDF, April 17, 2024.

Q1. What home improvements are eligible for the Energy Efficient Home Improvement Credit, and how much is the credit? (added December 22, 2022)

A1. The following energy efficient home improvements are eligible for the Energy Efficient Home Improvement Credit:

• Building envelope components satisfying the energy efficiency requirements in Q1 under the Energy Efficiency Requirements section:
  • exterior doors (30% of costs up to $250 per door, up to a total of $500);
  • exterior windows and skylights (30% of costs up to $600); and
  • insulation materials or systems and air sealing materials or systems (30% of costs).
• Home energy audits (30% of costs up to $150, see Q5 under the General Questions section.
• Residential energy property (30% of costs, including labor, up to $600 for each item) satisfying the energy efficiency requirements in Q1 under the Energy Efficiency Requirements section:
  • central air conditioners;
  • natural gas, propane, or oil water heaters;
  • natural gas, propane, or oil furnaces and hot water boilers; and
  • improvements to or replacements of panelboards, sub-panelboards, branch circuits, or feeders that are installed along with building envelope components or other energy property listed in these FAQs and enable its installation and use.
• Heat pumps and biomass stoves and biomass boilers (30% of costs, including labor) satisfying the energy efficiency requirements in Q1 under the Energy Efficiency Requirements section:
  • electric or natural gas heat pump water heaters;
  • electric or natural gas heat pumps; and
  • biomass stoves and biomass boilers.

Q2. Is there a limit on the amount of the Energy Efficient Home Improvement Credit that I can claim? (added December 22, 2022)

A2. Yes. There is a $1,200 aggregate yearly tax credit maximum for all building envelope components, home energy audits, and energy property. Electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and biomass boilers have a separate aggregate yearly credit limit of $2,000. Thus, the maximum total yearly energy efficient home improvement credit amount may be up to $3,200. See Q1 under the Examples section, for a set of examples illustrating how these credit limits work.