No. This is a credit that will reduce your tax dollar for dollar up to the amount of tax liability or the credit whichever is less.
Beginning January 1, 2023, the credit becomes equal to the lesser of 30% of the sum of amounts paid for qualifying home improvements or the annual $1,200 credit limit. In addition the the aggregate $1,200 limit, annual dollar credit limits apply to specific items including:
- Home energy audits: $150
- Exterior doors: $250 per door (up to $500 per year)
- Exterior windows and skylights, central A/C units, electric panels and related equipment, natural gas, propane and oil water heaters, furnaces or hot water boilers: $600
In addition to the $1,200 credit limit above, a separate aggregate yearly credit limit of $2,000 applies to electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and biomass boilers. This means you can claim a maximum total yearly energy efficient home improvement credit amount up to $3,200
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