For taxpayers making energy efficient home improvements in their main home, a federal tax credit is allowed to be claimed on their tax return. The maximum allowed tax credit in a year for qualified energy improvements is $3,200 and is comprised of two separate portions:
- A general credit capped at $1,200 for costs that include exterior doors, windows and skylights, home energy audits, as well as specified HVAC items that include water heaters, boilers and central air conditioning units.
- A second energy property credit capped at $2,000 for costs that include heat pumps and biomass stoves and boilers.
Beginning in 2025, to claim energy efficient home improvement tax credit, items must be purchased from an IRS registered Qualified Manufacturer (QM) and each item purchased must be labeled with a qualified product identification number (PIN). Taxpayers will be required to report the item’s PIN on their tax return, otherwise this tax credit will be disallowed.