It's tax season again, and we want to make sure you are equipped to take advantage of the tax credits for energy efficiency and clean energy upgrades available now. Due to the Inflation Reduction Act (IRA), residents can take advantage of some increased tax credits when they file this year. However, eligibility and specific details vary, so we always recommend consulting with a tax professional for more information.
If you received a DCSEU rebate for a home energy efficiency upgrade in 2023, you may qualify for a tax credit on your upgrade as well.
Here are some residential tax credits residents can take advantage of now:
Rooftop Solar Tax Credits
DC is one of best places to get rooftop solar in the country. Thanks to changes made by the IRA, households can receive up to 30% tax credit on installing rooftop solar starting from their 2022 tax filing. The credit decreases down to 26% in 2033.
Energy-Efficient Upgrades
Homeowners filing in 2024 can receive a tax credit to cover up to 30% up to an annual maximum of $1200 (heat pumps, biomass stoves, and boilers have a separate annual tax credit limit of $2000). This credit is subject to per item limitations with no lifetime limit.
2023 credits include:
- Windows - $600 across all windows
- Exterior doors - $250 per door, $500 across all doors
- Insulation - No property-specific limit, but subject to annual limit
- Heat pump water heaters - $2000 total
- Heat pumps - $2000 total
- Biomass stoves or boilers - $2000 total
- Central air conditioners - $600 per AC unit
- Electric Panel - $600 per property
- Home energy audits - $150 total
Check out DCSEU rebates for energy-efficient home heating & cooling that will save households an additional $50-$700 on these upgrades.
Replacing Heating & Cooling Systems Tax Credits
Heat pumps use electricity to transfer heat from a colder area to warmer area of a building. It is commonly used for heating and cooling buildings, and can be more energy-efficient than traditional heating and cooling systems.
Homeowners can get a tax credit up to $2000 when making the switch to a heat pump. District residents may also qualify for a $375-$700 rebate on a heat pump upgrade with a DCSEU rebate.
Electric Vehicles Tax Credits
Bought a new electric vehicle in 2023? You can get a tax credit up to $7,500 if your vehicle qualifies.
Here are some qualifications your vehicle must meet:
- Have a battery capacity of at least 7 kilowatt hours
- Have a gross vehicle weight rating of less than 14,000 pounds
- Be made by a qualified manufacturer.
- Undergo final assembly in North America
- Meet critical mineral and battery component requirements (New requirements as of April 18, 2023).
Purchased a used electric vehicle? You may qualify for a tax credit of 30% of the sale price up to $4,000.
The vehicle must:
- Have a sale price of $25,000 or less
- Have a model year at least 2 years earlier than the calendar year it was purchased.
- Not have already been transferred after August 16, 2022, to a qualified buyer.
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Check out these sites to get even more details about the Inflation Reduction Act tax credits and what's available in 2024:
Clean Energy for All | The White House
Inflation Reduction Act of 2022 - What it Means for You | Department of Energy
Residential Clean Energy Credit | Internal Revenue Service (irs.gov)
Energy Efficient Home Improvement Credit | Internal Revenue Service (irs.gov)
Credits for new clean vehicles purchased in 2023 or after | Internal Revenue Service (irs.gov)
Used Clean Vehicle Credit | Internal Revenue Service (irs.gov)
As funds from the Inflation Reduction Act continue to rollout, stay on the lookout for updated tax credits and rebate information. Many of these tax credits will be expanded next season. Until then, we hope you continue to take advantage of energy-efficient upgrades and savings with rebates from the DCSEU. As written, the IRA directs all funding for efficiency rebate programs through State Energy Offices. In the case of the District of Columbia, this means the District Department of Energy & Environment (DOEE), which administers the DCSEU contract. As this funding becomes available, the DCSEU will communicate with our customers and partners about what, if any, role the DCSEU will have.