Revisions to section 25C ENERGY EFFICIENT HOME IMPROVEMENT CREDIT
- Changes the name of the credit from Nonbusiness Energy Property Credit to Energy Efficient Home Improvement Credit.
- Extends the existing credit without changes through December 31, 2022. (This is the 10% credit for certain improvements with a $500 lifetime cap.)
- For property installed after December 31, 2022, the Act changes the credit as follows.
- The Energy Efficient Home Improvement Credit is extended through December 31, 2032.
- Increases the credit to 30% of listed improvements.
- Removes the $500 lifetime cap and replaces it with a $1200 annual cap.
- Within the $1200 annual cap, there are separate sub-caps for windows ($600), energy property ($600) and doors ($250 per door or $500 for all doors).
- Notwithstanding the previous caps, there is a credit of up to $2000 for the installation of an electric or natural gas heat pump water heater, an electric or natural gas heat pump, or a biomass stove or boiler.
- Removes roofing systems designed to prevent heat gain from the list of eligible building envelope improvements.
- Adds air sealing to the list of building envelope improvements.
- If changes are required to the home's electrical panel service (200 Amps or greater) to enable installation of other qualifying property, the electrical work is eligible for a credit. (In other words, if you need to upgrade your electrical service to install an electric heat pump, or efficient air conditioner, the cost of the electrical upgrade is eligible for the credit.
- Adds a credit for the cost of a home energy audit, with a maximum credit value of $150, and allows the IRS to require substantiation of the audit in such form as the secretary determines.
- Makes technical changes to the energy efficiency standards required to qualify for a credit.
- Beginning with property installed after December 31, 2024, the taxpayer must include product identification numbers for their energy efficient property on their tax returns.
Note that these changes all take effect after December 31, 2022, except for the extension of the current 10% credit, which is retroactive to December 31, 2021.
Source:
https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf
Pages 338-351
Cross-checked with the most recent version here.
PDF (712KB)
Subject to change because it has not been signed by the President yet.
