How much does your home consume? This is a question that most Americans don’t know the answer to, and it still causes us some concern. The government has just announced the new Home Energy Audit Tax Credit, thanks to which you can receive up to 30% of the money invested in this service. Just before we start, do you know why you need it? We’ll tell you too, don’t worry.
Government unveils new Home Energy Audit Tax Credit: this is the new program
The Home Energy Audit Tax Credit is a federal tax credit that allows homeowners to claim up to 30% of the costs of a qualified home energy audit, up to $150. This tax credit was retroactively extended through 2021 under the Consolidated Appropriations Act of 2021.
The purpose of the credit is to encourage homeowners to assess the energy efficiency of their homes in order to identify areas for improvement. A professional home energy audit will inspect the home and evaluate things like insulation, air leaks, heating and cooling equipment, lighting, appliances, and more.
The audit will provide a detailed report with recommendations for updates and improvements to help reduce energy waste and utility bills. As you may know, a home energy audit involves having an assessor conduct a thorough inspection and analysis of a home to evaluate where energy is being lost and how it can be saved.
By conducting an audit and making energy-efficient upgrades, homeowners can make their homes more comfortable while also reducing environmental impact. The tax credit makes audits more affordable, further encouraging homeowners to take these important first steps toward increasing efficiency.
The requirements, confirmed by the Government: here’s what you need to do
To qualify for the home energy audit tax credit, the audit must meet certain requirements set by the IRS. The audit must be performed by a qualified individual, follow set procedures, and provide actionable recommendations for improving your home’s energy efficiency.
-
Performed by qualified assessor: The audit must be completed by a certified and trained individual that meets the qualifications set by the IRS.
-
Follow set procedures: The assessor must follow the current Standard Work Specifications from RESNET or equivalent standards.
-
Provide written report: You must receive a written report from the assessor that provides recommendations for improving your home’s energy efficiency.
-
Dated after December 31, 2020: To qualify for the tax credit, the audit must be performed after December 31, 2020. Audits conducted prior to this date do not qualify.
Here’s how you can receive the Home Energy Audit Tax Credit: EPA confirms it
To claim the home energy audit tax credit, you must include IRS Form 5695 with your tax return for the year you had the audit completed. The credit can be claimed for the tax year the audit was performed. For example, if you had an audit done in 2022, you would claim the credit when filing your 2022 taxes in 2023.
The maximum credit is 30% of the cost of the home energy audit, up to $150. This means if your audit cost $500, your maximum credit would be $150. If your audit cost $300, your credit would be 30% of $300, or $90. You must provide receipts showing the cost of the home energy audit when you file Form 5695.
The receipt should clearly state what services were performed for the fee, such as “Home Energy Audit.” Make sure to save your receipt from the qualified assessor who completed the audit. The IRS requires documentation showing you paid for a qualified home energy audit during the tax year.
The truth is that, having seen most of the renewable subsidies, the Home Energy Audit Tax Credit seems to us to be one of the most complete. This service is ideal to control not only the energy expenditure, but also the source from which it comes, as well as to improve the implementation of renewables in the residential area, one of the intentions of the EPA when funding it.
