If you’ve been holding off on home improvements, a new law signed last year and now in effect as of Jan. 1, 2023, may provide a fresh incentive.
The Inflation Reduction Act, or IRA, includes tax credits and rebates for homeowners who make energy-saving updates to their homes. Credits for improvements like new solar panels, windows, doors and air conditioners are available now, while rebates for larger energy-efficient updates are expected to become available later this year or next year.Tax credits for smaller updates The IRA includes tax credits for around-the-house eco-friendly updates.
Make the most of it: Combining projects — like new insulation and a heat pump — can get you up to $3,200, says Kara Saul Rinaldi, president and CEO of the energy and environmental strategy firm AnnDyl Policy Group and an advocate of policies that helped shape the IRA.Check out: Dear Tax Guy: I just started renting my house out on Airbnb. What income-tax deductions can I claim on this property?
Make the most of it: The tax credit will reduce the cost of going solar, but if your goal is to lower your utility bill, first determine when you’ll see savings. This often depends on how much you currently pay, says Duane Knickerbocker, owner of Brower Mechanical, a Sacramento-based company that helps homeowners optimize energy use.
Learn more: Here’s a rundown of how the Inflation Reduction Act will affect your energy bills, investments and drug costs.