Save on HVAC Upgrades with the 25C Tax Credit

The 2023 Inflation Reduction Act (IRA) was passed to significantly invest in America’s effort to reduce the effects of US carbon pollution. Naples-area homeowners who are interested in making energy-efficient HVAC, electrical, and plumbing upgrades can save up to $3200 per year with the tax rebate included in the IRA.

The 25C Energy Efficient Home Improvement Tax Credit

Homeowners who make energy-efficient upgrades like energy efficient doors and windows and new water heaters will be eligible for the Energy Efficient Home Improvement tax credit. An extension of the existing 25C tax credit, this credit allows homeowners to deduct up to 30% of the cost of certain home improvements, capping at $3,200 per year.

New appliance installations and/or upgrades must meet certain requirements to qualify for the tax credit. Full details about the 25C Energy Efficient Home Improvement Tax Credit can be found here.

In addition, certain improvements must also meet applicable Consortium for Energy Efficiency and Energy Star requirements to be eligible for the 25C tax credit.

If you are thinking of making energy-saving changes to your home this year, the experts at Best Home Services can help determine which energy-efficient upgrades are right for your home and qualify for the tax credit. Call us at 239-420-7647.

The chart below details which energy efficient appliances and upgrades qualify for tax credit.

IMPORTANT NOTE: The 25C tax credits re factored into your tax credit amount when it’s time to file your 2023 taxes; they are not up-front discounts. Best Home Services can provide the documentation you need to claim the tax credits when the time comes, but we cannot provide tax filing or financial advice. Please contact an accountant or tax professional if you need help when filing.

25C tax credit eligibility

All Naples homeowners are eligible for the 25C Energy Efficient Home Improvement Tax Credit. It can be applied to any new qualifying equipment that is installed or any energy-efficient upgrades you make during 2023 and beyond.

The tax credit is capped annually at $1200 per household per year (not including heat pumps, which cap at $2000), with a total cap of $3200.

The 25C tax credit resets each year

The Energy Efficient Home Improvement 25C tax credit resets each tax year, so you can use these generous benefits for qualifying home improvement projects through 2032.

Claiming the 25C tax credit

After the installation of your qualified energy efficient home improvements, Best Home Services will provide you with documentation about your qualified upgrades. You will need these documents to claim your tax credits when you file your 2023 taxes.

If you need help filing your taxes when the time comes, please contact a tax professional—Best Home Services cannot offer financial or tax advice.

Estimate your savings

Want to see how much you can save on your taxes with the 25C credit? Use this IRA savings estimation calculator.

Cleaner air, cleaner future

The Inflation Reduction Act was passed to help Americans reduce the environmental impact of our reliance on fossil fuels, to lower our energy bills, and to enable the adoption of cleaner and more efficient energy sources. Naples-area homeowners can take advantage of tax credits and cash back rebate incentives to further reduce their expenses by investing in clean and energy efficient appliances and electrical upgrades.

Everyone benefits when we contribute to a cleaner and more sustainable future—cleaner air and lower energy bills are a win across the board! If you’re considering investing in energy-efficient upgrades and appliances this year, don’t hesitate to reach out to us at Best Home Services and learn about how we can help you take advantage of these exciting tax deduction opportunities.

Get started today and start saving!

It can be overwhelming to even think about starting the process of upgrading your home’s appliances. The trusted professionals at Best Home Services are here to help you and to answer any questions you might have about the Inflation Reduction Act. Contact us at 239-420-7647 today and make an appointment.

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