Does Inflation Reduction Act cover Duct sealing?

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I am bit confused whether 25C under Inflation Reduction Act cover duct sealing. It mentions, that air sealing is covered though.

DoninGAAnswer

Level 15

For windows, exterior doors and material designed to reduce heat loss - NO, the installation cost is not included.

For Qualified Energy Property - YES, the installation cost is included.

IRS Form 5695 Residential Energy Credits (draft instructions) for tax year 2022 - https://www.irs.gov/pub/irs-dft/i5695--dft.pdf

Qualified energy efficiency improvements. Qualified energy efficiency improvements are the following building envelope components installed on or in your main home that you owned during 2022 located in the United States if the original use of the component begins with you, the component can be expected to remain in use at least 5 years, and the component meets certain energy standards.
• Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home.
• Exterior windows and skylights.
• Exterior doors.
• Any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically and primarily designed to reduce the heat gain of your home.
For purposes of figuring the credit, don't include amounts paid for the onsite preparation, assembly, or original installation of the building envelope component.

Residential energy property costs. Residential energy property costs are costs of new qualified energy property that is installed on or in connection with your main home that you owned during 2022 located in the United States. Include any labor costs properly allocable to the onsite preparation, assembly, or original installation of the energy property.
Qualified energy property is any of the following.
• Certain electric heat pump water heaters; electric heat pumps; central air conditioners; and natural gas, propane, or oil water heaters.
• Qualified natural gas, propane, or oil furnaces and qualified natural gas, propane, or oil hot water boilers.
• Certain advanced main air circulating fans used in natural gas, propane, oil furnaces.

DoninGA

Level 15

Products that air seal (reduce air leaks) can also qualify, as long as they come with a Manufacturers Certification Statement, including:

Weather stripping
Spray foam in a can, designed to air seal
Caulk designed to air seal
House wrap

Tax Credit does NOT include installation costs.

Y

YoyoguyAuthor

Level 3

Thanks! Possible to share the verbiage, where it says only materials, and the list of materials shared above?

I am reading this https://www.congress.gov/bill/117th-congress/house-bill/5376/text, where it says labor costs are covered. Can you pls clarify that I wanna be double sure?

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(3) Air sealing insulation added to definition of building envelope component.--Section 25C(c)(3)(A) <> is amended by inserting ``, including air sealing material or system,'' after ``material or system''. (e) Modification of Residential Energy Property Expenditures.-- Section 25C(d) is amended to read as follows: ``(d) <> Residential Energy Property Expenditures.--For purposes of this section-- ``(1) In general.--The term `residential energy property expenditures' means expenditures made by the taxpayer for qualified energy property which is-- ``(A) installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer, and ``(B) originally placed in service by the taxpayer. Such term includes expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property.

DoninGA

Answer

Level 15

For windows, exterior doors and material designed to reduce heat loss - NO, the installation cost is not included.

For Qualified Energy Property - YES, the installation cost is included.

IRS Form 5695 Residential Energy Credits (draft instructions) for tax year 2022 - https://www.irs.gov/pub/irs-dft/i5695--dft.pdf

Qualified energy efficiency improvements. Qualified energy efficiency improvements are the following building envelope components installed on or in your main home that you owned during 2022 located in the United States if the original use of the component begins with you, the component can be expected to remain in use at least 5 years, and the component meets certain energy standards.
• Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home.
• Exterior windows and skylights.
• Exterior doors.
• Any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically and primarily designed to reduce the heat gain of your home.
For purposes of figuring the credit, don't include amounts paid for the onsite preparation, assembly, or original installation of the building envelope component.

Residential energy property costs. Residential energy property costs are costs of new qualified energy property that is installed on or in connection with your main home that you owned during 2022 located in the United States. Include any labor costs properly allocable to the onsite preparation, assembly, or original installation of the energy property.
Qualified energy property is any of the following.
• Certain electric heat pump water heaters; electric heat pumps; central air conditioners; and natural gas, propane, or oil water heaters.
• Qualified natural gas, propane, or oil furnaces and qualified natural gas, propane, or oil hot water boilers.
• Certain advanced main air circulating fans used in natural gas, propane, oil furnaces.