Exciting News: Home Energy Tax Credit (25C) Updates

Hey there, homeowners! We know you love your cozy home just as much as we love helping you keep it comfortable. That’s why Aquarius Home Services is thrilled to share some exciting news about recent updates to the Home Energy Tax Credit that could save you some serious cash on your energy-efficient upgrades. Whether you're eyeing a new heating & cooling system or are curious about your home’s impact on the environment, now's the time to get savvy about those potential savings!

What's New in the Home Energy Tax Credit?

Under the Inflation Reduction Act of 2022, the IRS has rolled out some fantastic changes to the Home Energy Tax Credit, making it even more beneficial for you to invest in energy-efficient improvements. Here’s the lowdown:

Increased Credit Amount:

If you make qualifying improvements to your home, you can now claim 30% of the total installation costs as a tax credit—up to a whopping $1,200 (AXX, Furnace, Water Heaters, Electric Panels, etc.) every year that you make a qualifying upgrade! And, under the 25C tax credit, heat pumps jump the limit to $2,000 per year. If you went with both improvements, that comes to a total of up to $3,200 overall, with no lifetime limit!

No Lifetime Limit:

Previously, you could only claim up to $500 over your lifetime. Now, you can snag that $1,200 (or $2,000 for certain systems) every single year you make a qualifying upgrade until 2032. That’s right, keep those upgrades coming and keep claiming those credits!

Expanded Eligible Improvements:

Since January 1, 2023, homeowners can claim credits for a variety of energy-efficient upgrades, including:

• Central air conditioners
• Water heaters
• Furnaces and boilers
• Heat pumps
• Home energy audits (up to $150)

Aquarius Home Services offers a wide variety of equipment and systems that qualify for these improved rebates. If you’re looking to get a home energy audit done, we recommend the Xcel Home Energy Squad, or for Center Point Energy Customers, Home Service Plus. This will identify areas within your home where energy consumption could be reduced.

Who Qualifies for Energy Upgrade Tax Credit?

Great news… if it’s your main home and you’re the one living there, you likely qualify! Just keep in mind:

• Your improvements must be made to an existing home (not new construction).
• The home must be located in the United States.
• Rental properties don’t qualify; this credit is for your primary residence only.

Why Upgrade?

Now that you know about the potential tax credits, let’s chat about why you might want to take advantage of them:

1. Save Money

Not only can you save on your tax bill, but energy-efficient systems often lower your monthly utility costs, meaning more savings in your pocket.

Upgrading from a low-efficiency natural gas furnace to an Energy Star-rated model can lead to significant savings on your energy bills. While a low-efficiency furnace can cost you around $1,903 annually, an upgraded Energy Star-rated furnace typically only consumes about $1,402 each year.

This translates to impressive savings of approximately $7,511 over the next fifteen years, making the investment in a more efficient system not just an eco-friendly choice, but a financially savvy one as well. Better yet, with the new IRA tax rebates, you’ll be saving up to an additional $1,200 on taxes every year that you make a qualifying upgrade.

2. Environmental Impact

By upgrading energy-efficient systems, you’re helping to reduce your carbon footprint and contribute to a healthier planet.

3. Increased Home Value

Energy-efficient upgrades can boost your home’s value, making it a wise investment for the future. Buyers value appliances that are going to last. It could save you time and money on quick repairs or replacement needed if you are planning on selling your home in the future.

Take Advantage of The Home Energy Credit

Assess Your Home

Look around and consider what upgrades might benefit you the most. Is your air conditioning system on its last leg? Is your water heater over ten years old? Now could be the perfect time to act! If you’re unsure where to get started, we recommend getting an energy assessment done.

Schedule a Home Energy Audit

This will not only help you identify where improvements can be made but you will receive a $150 tax credit to offset the cost of the service. If you’re looking to get a home energy audit done, we recommend the Xcel Home Energy Squad, or for Center Point Energy Customers, Home Service Plus.

Consult with Professionals

At Aquarius Home Services, we’re here to help! Whether it’s heating and cooling installation, heat pumps, or water heaters, our knowledgeable team can guide you through your options and ensure you get the best solutions for your home.

Claim the Credit

Aquarius is here to help you through the filing process. We make sure you receive a copy of the AHR certificate and the purchase invoice. All you do is fill out IRS Form 5695 and submit. Then those savings for taxes come flying in! To find out more about the tax credit visit IRS.gov/HomeEnergy.

The updated Home Energy Tax Credit is a golden opportunity for homeowners to invest in energy-efficient upgrades and reap the rewards financially and environmentally. If you have any questions or need help figuring out your next steps, don’t hesitate to reach out to us at Aquarius Home Services. We're here to ensure your home stays comfortable and energy-efficient, all while saving you money!

Happy upgrading, and may your home be cozy and efficient for years to come!