Every homeowner wants to know how they can save on home repairs and upgrades. Going with the cheapest estimate for your windows and doors project is not a smart decision, and usually means you’re getting an inexperienced or unlicensed contractor to complete the work. One great way to save money is to explore tax credits available to you relating to green energy initiatives.
On August 16, 2022, the Inflation Reduction Act came into effect, outlining a ten year plan of various changes to combat inflation in the United States. The Act covers three major areas – medical costs, IRS funding, and clean energy initiatives. In this blog, we will outline the clean energy initiative piece and explain how you can take full advantage of a tax benefit available to you to offset home improvements.
Energy Efficient Home Improvement Credit
Many homeowners are familiar with the old Nonbusiness Energy Property Credit, which could be applied against energy-efficient insulation, windows, doors, roofing, and more. This credit expired at the end of 2021 and had a $500 lifetime limit (meaning you could only take this tax benefit once with a maximum value of $500). This credit has been revived for 2022 – so act [very] quickly if you need a few upgrades in the 2022 year.
With the new Inflation Reduction Act, the Energy Efficient Home Improvement Credit has been introduced. It has an annual $1200 limit coming into effect on January 1, 2023. This is a fantastic opportunity to update your home over time; it means you can offset $1200 in qualified home updates or repairs every year rather than $500 just once.
With this new tax benefit, you can reduce your tax bill by:
- Installing or repairing skylights – up to $600/year
- Installing new exterior doors – up to $250 each per year with a maximum of two doors
- Purchasing energy-efficient heat pumps, central air conditioning systems, water heaters, and furnaces – up to $2000 (waiving the $1200 annual limit)
Book an estimate for work to begin in 2023
Calling now to book your free consultation with an estimate is smart; this way you’ll get on our books for installation in early 2023. We can help you take advantage of any credits pertaining to windows, skylights, and exterior doors.
It is worth noting that, unfortunately, roofing no longer qualifies for this credit. While installing a new roofing system is an excellent way to reduce your energy costs and go green, this particular Act of Congress does not allow for tax deductions for this type of project.
If you’re a homeowner in Connecticut in need of window, skylight, or exterior door replacements by an expert contractor, contact Harmony Home Improvement today. We will be happy to visit your property as soon as possible to provide you with a free estimate on the work!