For homeowners wanting to reduce their utility expenses and save on their upcoming federal taxes, now is a great time to start making energy efficiency upgrades on their properties.
The federal Inflation Reduction Act of 2022 includes the 25C: Energy Efficient Home Improvement Tax Credit. That part of the law created tax credits and deductions that make it more affordable to invest in technologies that reduce energy waste and maximize personal comfort year-round.
Plus, many of the tax credits can be combined with rebates and incentives offered by Clark Public Utilities, which drive the cost down even further.
Homeowners who complete projects before the end of the year may be able to receive the tax benefits when they file their federal 2023 taxes in a few months.
“These new tax credits apply to a wide range of products and services, plus they’re in place until 2032. That’s especially nice for those folks who want to make the investments but need a little time to financially prepare for them or want to spread them out over time,” said Clark Public Utilities Residential Programs Manager Trevor Frick. “For those that have been on the fence about making the investment, now is a great time to act, because the savings opportunities are significant.”
The tax credits can cover up to 30 percent of the costs of the upgrade and are available across a wide number of qualifying products and energy efficiency-related upgrades. There are cost caps per upgrade and an annual maximum of $3,200, but there is no lifetime dollar limit to the credit. The credit isn’t a refund. It’s only to reduce the amount of taxes you owe.
New home construction accounts for a large portion of housing options in Clark County and the law also includes a tax credit for builders of new single-family, manufactured and multifamily buildings.
Commercial building owners aren’t left out in the cold, either. Owners of those properties may qualify for tax deductions when reducing energy usage through upgrades to heating, cooling, and ventilation equipment or when upgrading water heaters and interior lighting.
Measures eligible for the tax credit are expansive and include numerous projects that are common in upgrading an older home. Projects like insulation installation, replacement windows, heat pumps, heat pump water heaters, solar energy systems and even electric panel upgrades are eligible.
For example, a qualifying heat pump water heater may be eligible for a tax credit of up to 30 percent of the project cost up to $2,000. If replacing an electric water heater with a qualifying heat pump water heater you may also be eligible for the Clark Public Utilities $700 rebate.
However, not every product in each category will qualify. That’s why it’s good to speak with an expert, especially the contractor you’re considering hiring for the job.
To be eligible for incentives or rebates from Clark Public Utilities, the work must be done in an electrically heated home by a contractor included in the utility’s contractor network, in addition to other qualifications.
