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Renovating or upgrading your home can be expensive, but here's the good news: in 2024, there are several tax credits available to help alleviate some of those costs. Thanks to the Inflation Reduction Act (IRA) of 2022, you may qualify for tax credits that support environmentally friendly home improvements, appliances, and electric vehicles. If you make qualifying energy-efficient changes to your home after January 1, 2023, you could be eligible for a tax credit of up to $3,200.
The Home Improvement Tax Credits You Can Access in 2024
You could receive up to 30% in tax credits for energy-efficient home improvements, including heat pumps, as well as rebates for efficiency upgrades, electrification projects, and other associated enhancements. Additionally, you may qualify for up to 30% in tax credits for installations like rooftop solar panels, energy storage batteries, geothermal heat pumps, and more. (Click here for details on the available tax credits for both new and used clean vehicles.)
The Maximum Credit You Can Claim Each Year Is:
$1,200 for energy property expenses and select energy-efficient home upgrades, with specific limits on doors ($250 per door and $500 total), windows ($600), and home energy audits ($150)
$2,000 per year for eligible heat pumps, biomass stoves, or biomass boilers
There is no lifetime cap on the credit. You can claim the maximum annual credit every year for eligible improvements until 2033.
Energy Efficiency Upgrades
One of the most significant home improvement tax credits is available for energy efficiency upgrades. In 2024, you can receive a tax credit worth 30% of the cost for qualifying improvements such as installing solar panels, energy-efficient windows and doors, insulation, specific energy-efficient roofing, and heating, ventilation, and air conditioning (HVAC) systems.
Electric Vehicle Charging Station Installation
Installing an electric vehicle charging station at your home in 2024 could make you eligible for a tax credit that covers 30% of the installation expenses. This includes the cost of the charging station, as well as any necessary wiring and related upgrades.
Upgrades to Water Heaters and HVAC Systems
You can receive a tax credit for purchasing qualifying high-efficiency water heaters and HVAC systems, with credits up to $600 based on the model’s efficiency rating. Eligible systems include electric heat pumps, central air conditioners, and water heaters or furnaces powered by natural gas, propane, or oil.
Upgrades for Home Accessibility
Tax credits for improving home accessibility for elderly or disabled residents are available in 2024. You can claim a credit worth 30% of the costs for modifications like walk-in bathtubs, grab bars, wheelchair ramps, widened doorways, hallways, and more.
Residential Renewable Energy Property
In addition to the solar panel credit mentioned earlier, you can also qualify for a tax credit equal to 30% of the cost for installing other residential renewable energy systems such as small wind turbines, geothermal heat pumps, and fuel cell power plants. There is no limit on the amount you can claim for this credit.
How to Get Started
If you’re thinking, “I could really use some rooftop solar,” or “I need an energy-efficient stove,” here’s some good news: The White House has created a guide to help you claim these credits. Before starting any project, be sure the credits apply to your upgrades. Once you confirm eligibility, you can get step-by-step details by finding your project on this list.
For instance, if you're looking to upgrade to a new, energy-efficient dryer, the White House reports that you can claim a tax credit for up to 30% of the cost. Additionally, you can claim up to $150 for a professional home energy audit to identify the improvements necessary to enhance your home’s efficiency. All households qualify for rebates up to $4,000, while low-income households may receive up to $8,000. Some low- and moderate-income households are even eligible for rebates that could cover up to 100% of the cost of installing new electric appliances.
If you're planning to make home improvements this year—and really, you should if possible—you’ll either save money through tax credits you can claim next year or through immediate rebates. These credits are valid through 2032, though some rebates might not be available for a few more months. Each state has its own rules, so be sure to check this map for your region’s specific requirements. The IRS also offers a website with detailed guidance that will be updated throughout the year.
When claiming these credits on your 2024 taxes, make sure to keep your receipts and installation invoices as proof of the improvements made and the costs incurred. Check the IRS guidelines to confirm which upgrades are eligible in each category. With proper documentation, these credits can help you recover a significant portion of the costs for major home improvements.
