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What Is the 25c Energy Efficiency Tax Credit?

Many homeowners have been putting off upgrading their home’s HVAC system because they know how expensive a new system installation can be. These homeowners also want to find ways to help the planet, but find that they can’t afford energy-efficient equipment. Luckily, there is an energy-efficient home improvement credit available to homeowners who make qualifying energy-efficient upgrades to their homes. It’s called the 25c Energy Efficiency Tax Credit.

The 25c Energy Efficiency Tax Credit was initially established under the Energy Policy Act of 2005 and has been extended multiple times since then – most recently through the Inflation Reduction Act of 2022. This tax credit aims to encourage homeowners to make improvements to their home’s energy efficiency by providing financial incentives in the form of federal income tax credits. The team at Atlas can help you navigate these programs so you can find out how you can qualify.

What Is the 25c Energy Efficiency Tax Credit?

What Projects Are Covered by the 25c Energy Efficiency Tax Credit?

The 25c Energy Efficient Tax Credit was aimed at making it easier to make energy-efficient home upgrades for the average consumer. Homeowners who make the switch will enjoy energy and cost savings by installing a new HVAC system. There are a variety of upgrades that qualify for the tax credit. The most common upgrades include installing energy-efficient windows and doors, heat pump water heaters, electric vehicles, and upgrading your HVAC system to a more energy-efficient model.

Benefits Provided by the 25c Energy Efficiency Tax Credit

In 2023, the 25c Energy Efficiency tax credit will provide eligible homeowners with a tax credit of up to 30% of the cost of qualifying energy-efficient home improvement upgrades. This means that if you invest in improving the energy efficiency of your home, you can receive up to 30% of your upgrade costs back as a tax credit.

Some of the qualifying upgrades that may be eligible for the 25c Energy Efficiency tax credit include a home energy audit, energy-efficient windows and doors, efficient HVAC systems, and water heaters that meet energy star program requirements. The tax credit amount is capped at $1,200 total for most taxpayers or $600 for a single energy efficiency improvement. Families save money and produce residential clean energy.

The 25c Energy Efficiency Tax Credit will provide this benefit for qualifying home improvements through 2031. In 2031, the credit amount is scheduled to fall to 26% of qualifying expenses. In 2034, the credit will only be 22% and expire at the end of the year if no further measures are passed by Congress.

It’s important to note that the 25c Energy Efficiency Tax Credit is different from other tax credits available for energy efficiency upgrades, such as the solar tax credit. The 25c Energy Efficiency Tax Credit is focused on more general upgrades, whereas the solar tax credit is focused specifically on solar energy systems. Both tax credits can be beneficial, depending on the energy-efficient home improvement upgrades you want to make to your home.

Take Advantage of Tax Benefits When Improving Your HVAC System

The 25c Energy Efficiency Tax Credit is a fantastic opportunity for homeowners looking to make their homes more energy-efficient and save money on their energy bills. It’s important to do your research and ensure that the upgrades you make are eligible for the tax credit, as well as meeting the energy efficiency standards set by the IRS (internal revenue service). By making these upgrades, you can not only benefit financially through the tax credit but also enjoy lower energy bills every month.

Talk to Atlas to See If You Have a Qualifying Property

So why wait? Take advantage of the 25c Energy Efficiency Tax Credit today and start enjoying the benefits of a more energy-efficient home. Talk to your local HVAC experts at Atlas Heating & Air to learn more about how you can become eligible for the 25c Energy Efficiency Tax Credit – contact us today.