There’s a new sheriff in town, and he wants to do away with home energy improvement tax credits.
If he gets his way, you have until December 31, 2025, to get your upgrades in place and qualify for the credit. The clock ticks.
What are these credits, and how do they work?
Let’s say you own your main personal residence and a vacation home. You want to save on utility costs for these properties by installing various improvements such as upgraded insulation, new windows, and new furnaces. Good idea!
And the tax law can help you by providing an energy-efficient home improvement credit of up to $3,200 per year for these and other items.
A $3,200 tax credit may not sound like much. But if you’re in the 24 percent income tax bracket, it’s equivalent to an almost $13,400 tax deduction.
Unfortunately, the rules are a bit complex.
$1,200 Annual Credit for Energy Improvements to Your Main Home
First, there is an annual credit capped at $1,200 for two categories of improvements:
1.
Qualified energy efficiency improvements
2.
Residential energy property expenditures
These must be new improvements that are reasonably expected to last at least five years.
The credit does not carry over to future years and is non-refundable (meaning that it’s limited to your annual ... Log in to view full article.
