Tax Topic

Residential Clean Energy Property Credit and Energy Efficient Home Improvement Credit

What was known as the Residential Energy Efficient Property Credit has now been split into two credits: 1) Residential Clean Energy Property Credit and 2) Energy Efficient Home Improvement Credit.

Certain expenditures (i.e. solar electrical/water heating, fuel cell, small wind energy, battery storage, geothermal heat pump) made for residential clean energy, placed in service after 2021, have been extended through 2034. This credit is generally limited to 30% of qualified expenditures made for property placed into services beginning in 2022 through 2032.

Separate from that, the energy efficient home improvement credit (for items such as windows/doors, insulation materials, efficient heating/cooling, etc.) is $1,200 (up from $500 in 2022)

The requirements for each of these credits is very specific and differ for different type of property and improvement.

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