For tax year 2024, there are two credits available: Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit. The credit is 30% of the costs paid plus installation, with individual credit limits. For electric panels, the limit is $600. The article below states the following:
Which home improvements qualify for the Energy Efficient Home Improvement Credit?
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, to 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
Any costs in excess of the costs applied to the credit can then be added to basis. Per the IRS:
You must reduce the cost basis of your home if a residential energy credit is allowed for any expense for any property. The increase in the basis of the property that would result from the expenses of the improvements to your home will be reduced by the amount of the allowed credit.
2024-2025 Energy Tax Credit: Which Home Improvements Qualify?
Energy Efficient Home Improvement Credit
IRS Publication 551
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