U.S. Department of the Treasury and IRS Release Guidance to Lower Americans Utility Bills, Increase Energy Efficiency of Homes
As part of the Biden-Harris Administration’s Investing in America agenda, the U.S. Treasury Department and the Internal Revenue Service released guidance on an important provision of the Inflation Reduction Act that will lower Americans’ utility bills.
The Inflation Reduction Act enhanced the energy efficient home credit. It allows home builders who construct, reconstruct, or rehabilitate energy efficient homes a tax credit of up to $5,000 per home. Today’s guidance provides clarity to home builders on the qualifications for the credit.
To qualify for the credit, homes must be eligible to participate in certain Energy Star programs and meet applicable energy saving requirements based on home type. For homes acquired in 2023 through 2032, the credit amount ranges from $500 to $5,000, depending on whether Energy Star or Zero Energy Ready Home program requirements are met. These programs certify the energy efficiency of a home’s appliances, lighting, insulation, and duct systems, as well as whether the home can accommodate heat pumps and electric vehicles. Homes must be certified by a third-party to verify they meet the requirements.
Other homes also have credits available, as do multi-unit residences. The press release is available at https://bit.ly/IRA_homes_PR.