Adding foam insulation to your home can help you save money on monthly heating and cooling costs, and now it can help you with your taxes too.
RetroFoam injection foam insulation qualifies for the energy-efficient home improvement credit beginning in 2023 and lasting the next 10 years. Our network of dealers across the country strives to make homes more energy efficient by creating an air seal in the existing walls.
Enough about us, though. Let’s jump right into what you need to know about the Inflation Reduction Act energy-efficient home improvement credit.
What is the Inflation Reduction Act?
The Inflation Reduction Act of 2022 is a budget reconciliation bill that invests around $300 billion in deficit reduction and $369 billion in energy security and climate change programs over the next ten years, according to a Senate summary of the bill.
So, as a homeowner looking to make energy-efficient home improvements, what does this mean for you?
Beginning in 2023, a household will have access to a tax credit that covers up to 30 percent of the cost of certain energy-efficient updates, according to a news release from the White House.
Here are the basics.
- A household can claim up to $1,200 in credit each year for adding insulation or installing other energy-efficient updates. There is also a special credit of up to $2,000 for electric heat pumps that provide super-efficient heating and cooling.
- Households can also claim a credit of up to $150 for a home energy audit conducted by an inspector. There will also be state programs that offer rebates for electric appliances and home retrofits that can lower monthly energy bills. You can read more about these rebates and other tax credits on the White House website.
Another key takeaway from the Inflation Reduction Act is that the previous tax credit lifetime cap of $500 has been changed to an annual credit of up to $1,200 each year through 2032.
What Else Qualifies for the Energy-Efficient Home Improvement Credit
Creating an air seal in your existing walls with RetroFoam will qualify you for the Inflation Reduction Act insulation credit.
Other energy-efficient home improvements that qualify for the tax credit include:
- Installing rooftop solar panels.
- Replacing appliances with Energy Star-rated models.
- Home weatherization services by professionals who work in the home performance industry. These contractors understand how your house works as a system and can offer solutions to solve problems using building science.
- Replacing cooling and heating systems with an efficient heat pump. The heat pump does the job of both a furnace and an air conditioner.
As you can see, there are several energy-efficient home improvements that will qualify you for the tax credit. The added bonus is that the energy-efficient home improvement credit has been changed, so you can claim these updates each year and receive up to $1,200.
You could buy all new Energy Star appliances one year and update your home’s insulation the next.
Making these energy-efficient updates may lower your overall tax liability. You will also see significant savings each month from lower energy usage.
If you want to learn more about the credits available, check out the Energy Star website or talk to your tax preparer. Here are the documents you will need to file for the tax credit in regard to RetroFoam insulation:
- Polymaster RetroFoam Manufacturer's Statement
- IRS Form 5695
- Copy of contract with RetroFoam dealer
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