EEHIC – Energy Efficient Home Improvement Credit Windows & Doors
Recently signed into law, the Inflation Reduction Act of 2022 (IRA), which reshapes tax credits for home improvements, is an opportunity for home owners to take advantage of great savings for their window and door projects. The IRA includes what is called the Energy Efficient Home Improvement Credit (EEHIC). Previously, these type of credits had a maximum lifetime cap of $500. The EEHIC now includes a cap of $1,200 annually in tax credits for home improvement projects.
Here’s the benefit breakdown for window and door home improvements:
Windows – $600 Max Annual Credit
Single Door – $250 Max Annual Credit
Multiple Doors – $500 Max Annual Credit
This comes to $1,100 of the max $1,200 credit, leaving room for another $100 to be claimed for another home improvement project. For example, let’s say you have a $5,000 quote for windows and doors. You would be able to claim a $1,100 tax credit for your project, essentially 22% of savings for your project!
Because this is an annual cap, you can get creative by breaking a project in half and doing part of the project in the back half of the year and the second half of the project at the beginning of the next year to claim $2,200 in tax credits for the window and door project over for the two tax returns.
To claim the credit, taxpayers must attach IRS Form 5695, residential energy credits, to their 1040 tax return.
