New Law Gives You $8,000 for Free To Make These 5 Home Renovations
Are you considering some home renovations for summer? If you approach your next remodeling project with an eye on sustainability, you may be able to reduce your home’s heating and cooling costs while getting money back from the federal government.
The Inflation Reduction Act of 2022 offers more than $8,000 in tax credits or rebates when you make specific energy improvements to your home.
You can save as much as 15% on your home heating and cooling costs with the addition of insulation in attics, floors over crawl spaces and basement rim joists, according to EPA.gov.
Through the state-administered HOMES rebates, homeowners in some states may qualify for up to $8,000 in rebates for insulation. The rebate may also apply to new HVAC systems in residential homes. These rebates may not be available until summer 2023, experts say. Your rebate will depend on the upgrades completed and your household income.
The new “high-efficiency electric home rebate program” delivers homeowners in lower income households — earning less than 150% of an area’s median income — up to $14,000 cash back when they purchase certain energy-efficient electric appliances such as electric stoves, heat pump water heaters, or an electric heat pump clothes dryer, CNBC reported.
Like the HOMES rebates, this offer will be available on a state-by-state basis and could be available as soon as later this year.
Energy-Efficient Doors and Windows
The “nonbusiness energy property credit” gives homeowners a 30% tax credit, worth up to $1,200 per year, for the installation of upgrades like energy-efficient skylights, insulation and exterior doors and windows. The credit is non-refundable, which means you can use it to reduce your tax liability, but you can’t claim the credit if you don’t owe taxes.
Heat Pumps, Heat Pump Water Heaters, Biomass Stoves and Boilers
The nonbusiness energy property credit also applies to heat pumps and other energy efficient water heating appliances. The cap for this home improvements extends to $2,000 per year.
Solar Panels and Other Renewable Energy Sources
Homeowners can receive up to 30% back in the cost of a solar panel installation in the form of a non-refundable tax credits. Other forms of renewable energy also qualify for the credit, including wind, geothermal energy and biomass fuel.
Homeowners who install solar or other clean energy sources between now and the end of 2032 can claim the tax credit. Unless the tax credit is extended, homeowners who make improvements in 2033 and 2034 will only be able to claim 26% or 22% of the cost of the project, respectively.
Homeowners should also ask their solar company of choice about tax credits and rebates available in their state or municipality to save even more money.
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Energy efficient home improvements can save you money on energy costs in the long run. These rebates and incentives can help your upgrades pay for themselves even faster. Plus, by making desirable home improvements, you may be able to increase the re-sale value of your home if you decide to sell.
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