5 Minute Guide to Non-Business Energy Tax Credits in the United States [2024]

Maybe you’re one of the homeowners who have to do some sort of maintenance each year. Whether small or big the government has approved a series of energy tax credits to help lower those costs. These credits can save you on a yearly basis from hundreds to potentially thousands depending on the activity.

If you’re one of those homeowners, then it’s important that you plan your home improvements with these credits in mind so you can get not only quality but also tax savings.

As of this writing, the homeownership rate in the U.S. was at 65.9% during the fourth quarter of 2022. (Bankrate) This represents approximately 231 million homeowners.

What You’ll Learn Today in 5 Minutes:

• The different types of energy tax credits by categories of eligible improvements such as energy-efficient home upgrades, and electric vehicles.
• What type of products meet the eligibility criteria?
• Some frequently asked questions
• Real-life examples to help guide you with your journey

---

What is EnergyStar? Why Do I See Their Stickers Everywhere?

ENERGY STAR® is the government-backed symbol for energy efficiency, providing simple, credible, and unbiased information that consumers and businesses rely on to make well-informed decisions.

Products that earn the ENERGY STAR label are independently certified to meet strict standards for energy efficiency set by the EPA.

---

Types of Energy Tax Credits:

Renewable Energy Systems

• Eligible improvements: Solar panels, wind turbines, geothermal heat pumps, and fuel cell systems.
• Who is it for: Homeowners and individuals investing in renewable energy solutions.
• Real-life Example: Sarah installs solar panels on her home, costing $20,000. She is eligible for a 26% tax credit, resulting in $5,200 in savings.

Energy-Efficient Home Upgrades

• Eligible improvements: Energy-efficient windows, doors, insulation, HVAC systems, water heaters, and roofing.
• Who is it for: Homeowners upgrading their homes to improve energy efficiency.
• Real-life Example: John installs energy-efficient windows and doors in his home, costing $10,000. He is eligible for a 10% tax credit, resulting in $1,000 in savings.

Nado Tip: Home energy audits are also eligible for tax credit treatment. Many homeowners begin with minor improvements such as adding insulation or sealing gaps during the winter.

Electric Vehicles

• Eligible vehicles: Qualified plug-in electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs).
• Who is it for: Individuals purchasing electric vehicles.
• Real-life Example: Emily purchases an electric vehicle for $40,000. She is eligible for a tax credit of up to $7,500, resulting in significant savings on her purchase.

Next Steps to Get Started

1. Research eligible improvements: Explore the EnergyStar website and IRS guidelines to understand which upgrades qualify for tax credits.
2. Evaluate your home: Assess your current energy usage and identify areas where you can make energy-efficient improvements.
3. Consult with professionals: Work with contractors, energy auditors, and tax advisors to determine the most cost-effective solutions and maximize your tax savings.
4. Keep records: Keep detailed records of your energy-efficient upgrades, including receipts, invoices, and certification documents, to support your tax credit claims.
5. Claim your credits: When filing your taxes, use IRS Form 5695 to claim your non-business energy-related tax credits and ensure accurate documentation.

Wrap Up

There are several energy tax credits of significant savings opportunities for individuals investing in renewable energy systems, energy-efficient home upgrades, and electric vehicles.

By reviewing your eligibility prior, you can begin to take the first steps toward maximizing your savings potential and contributing to a more sustainable future. Don’t miss out on these valuable tax incentives—start exploring energy-saving solutions today!