If you're in the market for solar or home improvements, this one's for you..........
Congress passed the "Inflation Reduction Act" a few weeks back. Lots of goodies and included were more generous incentives for home improvements. Here's a quick summary.
The break for adding solar panels to your home is extended through 2034. Individuals get a tax credit for installations whether they are installed in a primary residence or vacation home. Starting in 2023, the credit is expanded to cover battery storage technology that is installed in your residence. The credit equals 30% of the cost of the equipment and installation for 2022 through 2032.
INSULATION/WINDOWS/DOOR..........The credit for adding energy-efficient improvements to your main home is back. For 2022, the credit applies to 10% of the cost of certain types of insulation, plus external windows, doors and skylights. The credit also includes 100% of the cost of electric heat pumps and water heaters, some central air-conditioning systems and similar energy-saving investments. There is a lifetime credit limitation of $500. And the credit is capped for many items: No more than $150 for hot water boilers and furnaces, $200 for a window and $50 for a furnace circulating fan, for example. This credit originally expired at the end of last year, but Congress has now revived it.
But starting in 2023, the credit is larger: First, the credit percentage increases to 30% of costs. Second, the $500 lifetime limit is replaced with a $1,200 annual limit. This annual limit is lowered to $600 in the aggregate for exterior windows and skylights and $500 for exterior doors, and for other items. The annual limit increases to $2,000 for a biomass stove or hot water boiler, or an electric or natural gas heat pump put in the home. And third, you can take a credit for up to $150 of the cost of a home energy audit.
So keep your receipts and I'll sort it out with you at tax time.
If you have questions, please let me know.