Updated FAQs were released to the public in Fact Sheet 2025-01 PDF, Jan. 17, 2025. This fact sheet contains all of the FAQs in one downloadable PDF.
Q1. What home improvements are eligible for the credit, and how much is the credit? (updated Jan. 17, 2025)
A1. The following energy efficient home improvements are eligible for the credit. The law divides the items eligible for the credit into three categories, each of which includes credit caps:
- “Qualified energy efficiency improvements” consisting of certain “energy efficient building envelope component[s]” that satisfy the Energy efficiency requirements and consist of:
- exterior doors (30% of costs up to $250 per door, up to a total of $500 if multiple doors are installed);
- exterior windows and skylights (30% of costs up to $600); and
- insulation materials or systems and air sealing materials or systems (30% of costs up to $1,200).
- “Residential energy property expenditures” (30% of costs, including certain labor) that satisfy Energy efficiency requirements and consist of:
- Property subject to a $600 cap per item:
- central air conditioners;
- natural gas, propane, or oil water heaters;
- natural gas, propane, or oil furnaces or hot water boilers;
- oil furnaces or hot water boilers meeting certain requirements;
- improvements to or replacements of panelboards, sub-panelboards, branch circuits, or feeders that are installed in conjunction with any qualified energy efficiency improvements, or any other qualified energy property for which an Energy Efficient Home Improvement Credit is allowed, and enable its installation and use (“enabling property”).
- Property not subject to the $600 cap:
- electric or natural gas heat pump water heaters;
- electric or natural gas heat pumps;
- biomass stoves or boilers meeting certain requirements.
- Property subject to a $600 cap per item:
- Home energy audits (credit is 30% of the cost with a cap of $150).
Q2. Is there a limit on the total amount of the credit that a taxpayer can claim? (updated Jan. 17, 2025)
A2. Yes. The credit is generally limited to $1,200 for each taxpayer for any taxable year, with the exception of a $2,000 limit per taxpayer per taxable year for certain property (discussed in this answer below).
Within the $1,200 annual limitation, there are further annual limitations for certain property:
- Exterior doors are capped at $250 per door, up to a total of $500 if multiple doors are installed.
- Exterior windows and skylights are capped at $600 in aggregate.
- Residential energy property expenditures for qualified energy property are capped at $600 per item of property (except for heat pump water heaters and heat pumps, and biomass stoves or boilers, which are subject to the limitation discussed in this answer below).
- Home energy audits are capped at $150.
The credit is limited to $2,000 for each taxpayer for any taxable year in the aggregate for electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves or boilers.
Thus, a taxpayer could claim a total credit of $3,200, if the taxpayer had sufficient expenditures in categories of property (or a home energy audit) subject to the $1,200 limitation and in categories of property subject to the $2,000 limitation.
See the Examples page, for a set of examples illustrating how these credit limits work.
Q3. Can taxpayers claim the credit for qualified property they install themselves? (added Jan. 17, 2025)
A3. Yes. However, qualified property performs optimally when installed by qualified professionals. Visit Energy Skilled For Consumers for information on finding qualified contractors in your area or becoming one.
Q4. Are expenditures for window treatments, such as blinds, shutters, or tinting, eligible for the credit? (added Jan. 17, 2025)
A4. No. An energy efficient building envelope component that is not an exterior window, exterior skylight, or exterior door must meet the prescriptive criteria for such component established by the most recent International Energy Conservation Code (IECC) standard in effect as of the beginning of the calendar year that is 2 years prior to the calendar year in which such component is placed in service. Window treatments do not meet the prescriptive criteria of the IECC. Window treatments also do not qualify under either of the other two categories of property eligible for the credit.
Related
- Energy efficient home improvement: Qualifying expenditures and credit amount
- Energy efficient home improvement: Energy efficiency requirements
- Energy efficient home improvement: Qualifying residence
- Energy efficient home improvement: Labor costs
- Energy efficient home improvement: Timing of credits
- Energy efficient home improvement: PIN requirements
- Energy efficient home improvement: General questions
- Energy efficient home improvement: Examples - How the credit limits work
Previous updates to FAQs
- Fact Sheet 2024-15 PDF, April 17, 2024
- Fact Sheet 2022-40 PDF, Dec. 22, 2022