Residential Energy Tax Credit
The Residential Energy Tax Credit is a federal tax incentive designed to encourage homeowners to invest in energy-efficient improvements to their residences. This credit allows taxpayers to receive a dollar-for-dollar reduction in their federal income tax liability for certain qualified expenditures related to renewable energy systems and energy-efficient home upgrades.
Eligible improvements may include solar energy systems, geothermal heat pumps, wind turbines, and certain energy-efficient windows, doors, and insulation. The amount of the credit can vary depending on the specific upgrade and the year it was installed. For example, as of recent tax years, homeowners could claim a credit of up to 26% of the costs associated with solar energy systems.
It’s important for homeowners to retain documentation of the expenses incurred and to consult IRS guidelines or a tax professional to ensure compliance with the specific requirements for claiming this credit.
« Back to Glossary Index