How do I know if my windows qualify for this program?
To be eligible for the tax credit, your new windows must meet the ENERGY STAR Most Efficient criteria. Eligible windows usually bear a certification (seal, mark, logo) on the product detail page; if you're unsure if your new windows meet the required standards for air sealing, feel free to reach out and we can help you verify their eligibility.
I used spray foam insulation - am I eligible to claim a tax credit?
Yes - assuming that the spray foam you used provides an air seal and bears a Manufacturers Certification Statement on the label. A wide range of insulation products are eligible for the tax credit; weatherstripping, house wrap, and spray foam in a can can all qualify. Traditional insulation materials like batts, rolls, and expanding spray are also eligible. In general, most energy efficient home improvements completed by homeowners will be eligible; you can always contact Castle to confirm the eligibility of your project. The energy efficiency standards of a product can be found online at ENERGY STAR’s site.
I am already claiming other tax credits for rooftop solar and other energy efficiency improvements I've made - can I claim a credit for insulation as well?
Yes, you can claim both credits. Each is subject to its own limits of 30% of the cost for the eligible expenses. Insulation, windows, and doors are further capped at $600 per type of eligible expense, and the maximum credit you can claim in a year is $1,200 (recently increased due to the Inflation Reduction Act). Example: You complete an attic insulation project involving $5,000 of new windows/skylights and $3,000 of new insulation. You'd get $600 in federal tax credits for the new windows/skylights (30% of $5,000, capped at $600) and $600 for the insulation (30% of $3,000, capped at $600).
I usually get a tax refund each year, will this income tax credit be relevant for me?
The Federal Residential Energy Credit is a non-refundable, federal income tax credit. This means you need to have a federal income tax liability in the year you intend to take advantage of the credit to take advantage of the credit. That said, the credit for insulation, windows, and doors can be carried forward to future years if unused, so you can establish the credit in a year when other energy efficiency tax credits are being used (i.e solar system tax credits), and use the federal residential energy credits in future years.
I've added weatherstripping and other insulation products as part of a repair job, not as part of a larger renovation. Am I eligible to claim this credit?
There is no requirement that home improvements made qualify as a capital improvement. Repair work done that involves adding insulation to have a more efficient home is likely an eligible expense.
I'm still not sure I'm eligible for this credit - my tax preparer has never mentioned this to me.
While we love researching and sharing information about different tax programs, Castle is not a tax preparer and doesn't offer tax advice. You should always seek the advice of a tax professional when considering your eligibility for a federal income tax credit.
I live in a single family home - I thought these credits were only for commercial properties?
While there are a wide range of financial incentives available for commercial real estate owners to make energy efficiency improvements at their properties, Federal Residential Energy Credits are only available to homeowners at their primary residence.
I just bought my home and it was renovated recently - is there any need to invest in additional insulation?
It never hurts to complete a home energy audit to see if there is an energy efficient home improvement that you could make to save more on your utility bills. Home energy audits are available for free to most NY residents, and are a great way to ensure already installed air sealing materials are working as intended in your home.
My contractor already claimed rebates on my behalf - am I eligible for federal tax credits and other energy savings?
Yes! Certified contractors have access to state programs to save you money on your home upgrades, but the programs renewed and expanded by the Inflation Reduction Act are claimed on your personal tax filing. The federal government, state government, local governments, and utility companies all offer their own slate of incentives, so make sure to check in with Castle to make sure you're not leaving any money on the table.
I am already claiming other tax credits for rooftop solar and other energy efficiency improvements I've made - can I claim a credit for insulation as well?
Yes - adding a renewable energy system to your home doesn't preclude you from also claiming a tax credit for an insulation installation. Each program is subject to a unique cap: you can claim up to $600 in tax credit for your insulation installation, up to 30% of the installation cost for your solar system, and add equipment like a heat pump or electric heat pump water heater to get an additional $2,000 in federal tax credits. These credits can carry forward to future tax years, so even if your personal tax liability is relatively small in the year of a renovation, you can use unused credit in future tax years.
What happens if part or all of the Inflation Reduction Act changes?
The Inflation Reduction Act tax credits are available to homeowners until 2032 under the current law. If part or all of the law were to be changed, it would be highly unlikely that homeowners who previously claimed any credit on their annual tax return would need to pay these credits back. To stay informed on any changes to these tax incentives, you can follow our Savings Newsletter here.
