Energy Efficient Home Improvement Credit 2022

Child girl warmed by a wood burning stove at home

The original Energy Efficient Home Improvement Credit expired on December 31, 2022. That only gave a very limited $500 lifetime credit for energy efficient home improvements.

The NEW Energy Efficient Home Improvement Credits, as part of the 2022 Inflation Reduction Act, increases the tax credit to $1,200 each year until 2032! Also new is that credit was also expanded to include both your personal residence as well as a vacation or second resiential property.

Starting in 2023, the credit will be equal to 30% of the TOTAL costs for all eligible home improvements made during any one year. So, if you made Energy Efficient improvements to your home that cost $4,000, you would cget the maximum tax credit of $1,200 for that year.

It is important to note that, from 2023 to 2032, these tax credits cannot be carired foward!

However, if you have credits for 2022 form the Residential Clean Energy Property Credit, unused amount of the credit, (limited to $500 per year), may be used to in future years.

To claim Residential Energy Efficiency Property Credits for tax year 2022, file Form 5695.

What types of Home Improvements are Elegible

The law also contains 10-year consumer tax credits to bring down the cost of heat pumps, rooftop solar, electric HVAC, water heaters, wood-burning stoves, solar, batteries and geothermal. 

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