Inflation Reduction Act: Home Envelope tax credit
Save money with home envelope upgrades and get a tax credit from the federal government.
Rebate Overview
Overview
The Inflation Reduction Act offers a tax credit for homeowners who improve their home's energy efficiency. This credit covers 30% of the cost for eligible upgrades, up to a maximum of $1,200 per year. Eligible improvements include insulation, energy-efficient windows and doors, and air sealing products. Please note, the credit applies only to materials costs, not labor. Additionally, products that reduce air leaks, such as weather stripping, spray foam, caulk, and house wrap, qualify if they come with a manufacturer's certification statement. Upgrades completed in 2025 and claimed on your 2025 tax return (filed in early 2026) should be safe. However, there is a possibility that parts of the Inflation Reduction Act may be repealed starting with the 2026 tax year. We are monitoring this closely and will update our guidance as more information becomes available.
Benefits
Improving your home's energy efficiency can make your living space more comfortable and reduce your energy bills. By taking advantage of this tax credit, you can invest in upgrades that not only enhance your home's value but also contribute to a healthier environment by lowering energy consumption.
More Information
- Eligible Improvements:
- Insulation materials or systems
- Exterior doors and windows that meet Energy Star requirements
- Air sealing materials or systems
- Home energy audits
- Credit Limits:
- Up to $150 for a home energy audit
- Up to $250 per exterior door, with a total limit of $500 for all doors
- Up to $600 for exterior windows and skylights
- Up to $1,200 for insulation and air sealing materials or systems
- Claiming the Credit:
- File Form 5695, Residential Energy Credits Part II, with your tax return
- Claim the credit for the tax year when the property is installed, not merely purchased
Details
- Expiration date: December 31, 2032
- Incentive type: Tax Credit
- Amount: $ 1,200
- Maximum Amount: $ 1,200
- Maximum Percent: 30%
- Category: Home Envelope
- Link: More details
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