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How to Qualify for a Tax Credit for Insulation Upgrades | Save Up to $1,200

On January 1, 2023, an increased tax credit became available to homeowners who upgraded their insulation and added air sealing in their homes.

 

What is the Energy Efficient Home Improvement Tax Credit?

Adding insulation and air sealing to your home will lower energy costs and contribute to a clean energy future. To add to this benefit to upgrade your insulation, the federal government is offering a significant tax credit that could save you as much as $1,200 off your tax bill. A tax credit is an amount of money that taxpayers can subtract from the income taxes they owe.

How do I conserve energy and reduce greenhouse gas emissions?

No other energy conservation system is quicker to install, or more certain to succeed than insulation and air sealing. Insulation upgrades are a cost-effective, energy-saving measure that increases home comfort while reducing greenhouse gas emissions and contributes to the green environment.

Who is eligible for this federal government incentive?

All taxpaying homeowners are eligible. The home must be owned and used by the taxpayer as their principal residence. The tax credit does not apply to a newly constructed home. Homeowners who have no tax liability are not eligible for the tax credit.

How much money will you get back if you are eligible and apply for the tax credit?

For homeowners who improve their insulation levels, the maximum amount of money returned to the homeowner through the tax credit is $1,200.

How do you know if your house needs more insulation and air sealing?

There are over 78 million homes that today remain under-insulated. This is likely the result of older, less stringent energy codes and some homebuilders who focused on low-cost options during construction. This is an ideal time to bring your insulation levels up to today’s code. Also, air sealing was not code until 2015, which means your home may not even have any air sealing if your home was built before 2015.

What products qualify?

Insulation materials that reduce heat loss or heat gain from a living space qualify. This includes insulation, air sealants, vapor and air retarders, recessed light covers, and attic hatch covers.

Where are these products installed?

Attics are the primary place and where typically you will get the most money back. Other areas include exterior or interior wall cavities, basements, crawlspaces, and the attic access panel/drop-down stairs.

Do you have to hire a professional insulation contractor?

If you do not have your insulation professionally installed, you will not qualify for this tax credit. Also, you want insulation materials professionally installed, in a safe manner, to manufacturers’ specifications and ASTM standards. For example, improper preparation and installation of insulation can enable moisture/ mold issues, trap existing house toxins, and enable some fire risks and other unsafe conditions due to heat buildup in some recessed light fixtures.

 

 

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