Add electric-vehicle chargers, heat pumps, smart thermostats and more to the list of energy-efficiency home improvements that can earn homeowners a tax credit.
The U.S. Environmental Protection Agency said Tuesday its Energy Star program, which already targeted water heaters, lower-impact appliances and other upgrades, now extends to additional “green-minded” home improvements. Such upgrades are intended to save the average family about $500 a year on utility bills in addition to the IRS perk.
In recent tax years, including for 2021 returns currently being filed, an individual may claim a credit for (1) 10% of the cost of qualified energy efficiency improvements and (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during the taxable year, subject to the overall credit limit of $500. In its current form, this is a one-time credit.
Learn more about the newly named Energy Star Home Upgrade program at ENERGYSTAR.gov/homeupgrade. And here’s the form you’ll need to apply for the tax credit: IRS Form 5695: Residential Energy Credits.
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Like its earlier versions, the program works with manufacturers and retailers for official Energy Star labeling.
Six new home improvements that qualify:
- An ENERGY STAR certified air source heat pump for clean and efficient heating and cooling;
- An ENERGY STAR certified heat pump water heater for super-efficient hot water;
- An ENERGY STAR certified smart thermostat with smart climate controls;
- High-performing ENERGY STAR certified windows and storm windows;
- A well-insulated and sealed attic;
- An electric vehicle charger for home.
The action is part of an ambitious promise by the Biden administration to steer the country toward net-zero carbon and methane emissions by 2050, the pollution that’s been responsible for sending Earth’s temperatures higher. And even sooner, the president and others want to cut emissions by at least half by the end of this decade, a pledge in keeping with those from the world’s most powerful economies, and largely reliant on businesses and households to follow suit. So far, government agencies have taken steps to slow climate change in lieu of broad passage of an environmental agenda on Capitol Hill.
Read: Solar tax credits and heat pump rebates: All the ways Build Back Better could incentivize cleaner energy at home
“Every American can make a difference in protecting our climate with the choices they make at home — and …….