Energy Efficient Home Improvement Credit
Final Opportunity: Available Through Tax Year 2025
Under the One Beautiful Bill Act, the Energy Efficient Home Improvement Credit offers enhanced incentives for homeowners making qualified energy upgrades. This credit applies to improvements placed in service from 2023 through 2025, and expires after December 31, 2025.
Credit Highlights
- 30% of qualifying costs for energy-efficient upgrades to a primary residence
- Annual limits apply, based on type of improvement
Annual Credit Limits
|
Improvement Type |
Annual Credit Limit |
|---|---|
|
Total improvements (most items) |
$1,200 |
|
Residential energy property expenditures |
$600 |
|
Exterior windows/skylights (aggregate) |
$600 |
|
Exterior doors (per door / total) |
$250 / $500 |
|
Heat pumps, biomass stoves/boilers |
$2,000 (not subject to $1,200 cap) |
|
Home energy audits |
$150 |
Qualified Upgrades Include
- Insulation (now includes air sealing insulation)
- Energy-efficient exterior doors, windows, and skylights
Note: Roofs are excluded under the updated law
Residential Energy Property Must Meet Efficiency Standards
Eligible systems include:
- Electric or natural gas heat pump water heaters
- Electric or natural gas heat pumps
- Central air conditioners
- High-efficiency water heaters, furnaces, boilers (natural gas, propane, oil)
- Biomass-fueled stoves and boilers
- Oil furnaces or hot water boilers
- Electrical panel upgrades (minimum 200 amps) installed in conjunction with eligible improvements
What's New in 2025
To qualify for credits in 2025, taxpayers must:
- Report the Qualified Product Identification Number (PIN) assigned by the manufacturer
- Ensure the equipment is produced by an IRS-registered manufacturer
- Understand the credit is nonrefundable and cannot be carried forward
Deadline Reminder
All qualifying improvements must be installed and placed in service by December 31, 2025. After that, this credit will no longer be available.