Thinking about upgrading your home to be more energy efficient? Whether you’re replacing windows, installing insulation, or considering solar panels down the road, there’s good news: the IRS is offering a financial nudge through the Energy Efficient Home Improvement Credit.
Thanks to the Inflation Reduction Act of 2022, you may be eligible to claim up to $1,200 in tax credits per year for qualified improvements. But before you start swinging the hammer or scheduling that audit, let’s walk through what qualifies, how to plan strategically, and why this could be a smart move for both your wallet and the planet.
Chapter 1: The IRS Green Light – Notice 2023-59
In a move to promote clean energy and efficient living, the IRS issued Notice 2023-59, outlining what qualifies as a home energy audit—a key component of maximizing your tax savings.
Under this new guidance, you can now claim the cost of a certified home energy audit as part of your tax credit package. This is a big deal. It means you can get credit just for having an expert assess how your home could be more energy-efficient—even before you do any work.
Let’s break it down.
Chapter 2: What Is the Energy Efficient Home Improvement Credit?
This tax credit isn’t a rebate or a refund. It’s a non-refundable tax credit, which means it can reduce your tax liability, but it won’t generate a refund if your liability hits zero.
Here’s how it works:
- Credit amount: 30% of qualified expenses, capped at $1,200 per year
- Eligibility: Applies to energy-efficient upgrades in your primary residence
- Annual limits:
- $250 for a qualifying exterior door (max $500 total for doors)
- $600 for windows and skylights
- $150 for a home energy audit
Pro Tip: Spread your upgrades over multiple years to maximize the full credit.
Chapter 3: Energy Audits – The $150 You Shouldn’t Skip
This is where many homeowners leave money on the table.
A certified home energy audit is essentially a roadmap for improvement. A professional evaluates your home’s energy use and recommends the most impactful upgrades. Think of it like a financial advisor—but for your HVAC and insulation.
Here’s the IRS-approved scoop:
- You’ll get 30% of the audit cost back as a credit, up to $150.
- The audit must meet specific IRS criteria and be performed by a qualified auditor.
- The credit is in addition to the $1,200 annual limit, meaning it’s a bonus, not a deduction from your main cap.
Chapter 4: Tax Credits for Home Energy Improvement
Chapter 5: Smart Tax Planning for Smart Homes
Let’s say Bob, our fictional yet fiscally-savvy homeowner, wants to replace his old windows, add insulation, and upgrade his heat pump. These are all eligible upgrades—but he wants to avoid wasting his credit in one shot.
- Year 1: Get a certified home energy audit (credit up to $150) and upgrade insulation ($600).
- Year 2: Replace windows ($600) and install a high-efficiency boiler ($600).
Total tax savings over 2 years: $1,950 in federal tax credits.
And since the credit resets each year, Bob’s careful planning lets him claim more over time than if he rushed everything into one tax year.
Chapter 6: Who Should Jump on This?
This credit is particularly relevant for:
- Homeowners in Northern Virginia with aging homes and rising utility bills
- High-net-worth individuals looking to boost property value and capture additional tax savings
- Eco-conscious homeowners aiming for sustainability without sacrificing ROI
If your tax bill exceeds $1,200 in any given year, it makes sense to take advantage of this credit.
Reminder: This is a non-refundable credit. So if your tax due is less than the credit, you can only reduce your liability to $0—no cash back.
Chapter 7: Avoid These Pitfalls
- Overestimating eligibility: Not all improvements qualify. Check IRS guidance or talk to a tax expert.
- Skipping documentation: Keep receipts, audit reports, and product certifications.
- Missing the audit window: The audit must follow IRS-approved standards.
Chapter 8: How JS Morlu Can Help You Save (and Stay Compliant)
At JS Morlu, we help clients make strategic financial decisions—like how to maximize tax credits and ensure all paperwork is in order. We’ve assisted hundreds of homeowners and high-net-worth individuals in optimizing their tax strategy.
Here’s how we can help:
- Evaluate your current home improvements for credit eligibility
- Recommend trusted, IRS-compliant energy auditors
- Strategize improvements across multiple years
- Prepare and file your tax credit documentation accurately
Want personalized guidance? 
Schedule a free consultation today.
Final Thoughts
Upgrading your home doesn’t just boost comfort—it can slash your taxes if done right. With the IRS giving clear guidance and the Inflation Reduction Act opening new doors for homeowners, now is the time to act.
Don’t let these credits expire while you’re still mulling it over. Plan your improvements, claim your audit credit, and let JS Morlu help you make Uncle Sam chip in for your energy upgrades.
