The Internal Revenue Service (IRS) has published guidance for contractors and homeowners with respect to the new federal tax credit for a qualified home energy audit. The amount of the credit is 30% of the cost of the audit, up to a maximum of $150. This new credit is part of a broader list of home efficiency tax credits offered under Section 25C of the Internal Revenue Code, as modified by the Inflation Reduction Act of 2022.
Tax credits offered under 25C are available beginning January 1, 2023 through December 31, 2032. As with other federal home energy tax credits, the homeowner must have tax liability to qualify. It is also important to note the amount of the credit received by a taxpayer must be counted toward the overall credit limit for qualified home efficiency improvements made under 25C, which is capped at $1,200 annually.
In its notice, the IRS provides a list of minimum requirements that must be met by contractors conducting the audit, as summarized below.
For energy audits conducted during the 2023 taxable year (January 1, 2023 through December 31, 2023), these requirements must be followed: