Tax Credits You Don't Want to Miss in 2024
September 25, 2024
As a high-performance home efficiency, HVAC, and solar contractor in the Greater Sacramento area, Brower Mechanical offers numerous services that can help provide energy savings, improve comfort, and promote healthier indoor air. We prioritize helping local homeowners get the most value out of their upgrades, which means our team stays up to date with available incentives in our area.
As we approach the end of 2024, now is the perfect time to capitalize on significant savings that can make energy efficiency and sustainability more affordable. Keep reading to learn what tax credits are available now and why upgrading your home before the end of the year can provide the quickest savings.
How Tax Credits Work
Tax credits are incentives that directly reduce your tax liability on a dollar-for-dollar basis, making them a valuable tool for homeowners looking to save money on energy efficient upgrades. The tax credits mentioned here are non-refundable, which means they will not result in a tax refund. To claim these credits, you’ll need to work with your tax professional to complete the appropriate IRS forms and keep detailed records of your expenses.
2024 Residential Clean Energy Credit
Homeowners, businesses, and tax-exempt organizations alike can take advantage of this federal tax credit, which is equal to 30% of the total cost of qualified clean energy installations. Often referred to as the solar tax credit, the Residential Clean Energy Credit does cover solar installation, and it covers other clean energy systems as well.
In 2024, there is no maximum limit on the Residential Clean Energy Credit. If the credit amount exceeds the amount of taxes you owe for the year, any remaining balance will rollover to the following tax year. Qualifying non-profits and tax-exempt organizations can receive a direct payment in place of the tax credit. Here’s what’s covered under the credit:
Labor costs
Permitting & inspection fees
Wiring, inverters, mounting equipment
And more
Tax Credits for Home Efficiency & Electrification
The Energy Efficient Home Improvement Tax Credit covers up to 30% of the total cost of qualified home improvements. However, there are limits to the amount you can claim per upgrade, and the total amount you can claim in a given year is $3,200, which is broken up into two separate groups:
$2,000 combined maximum for heat pumps, ductless mini splits, and heat pump hot water heaters
$1,200 combined maximum for qualified insulation and air sealing expenses, energy audits ($150 limit), electrical panel upgrades ($600 limit), windows ($600 limit), and more
Act Now for the Quickest Savings!
Timing is everything when it comes to maximizing your savings through tax credits and incentives. By taking action before the end of 2024, you’ll receive your tax credit with your annual returns in April, which is the shortest payback period on your investment. If you wait until 2025 to improve your home, you’ll have to wait for tax season in 2026 to see incentive savings. Plus, the sooner you install energy efficient and clean energy upgrades, the sooner you can benefit from the energy savings that come with a more efficient home.
Brower Mechanical: Your Greater Sacramento Whole-Home Experts
Whether you’re ready to go all-electric with home heating and cooling or want to take control of your electricity costs with solar panels, our team can help! Our comprehensive home services have been helping homeowners throughout Roseville, Rocklin, and Greater Sacramento since 1979. Our team has established a local reputation for our professionalism, accountability, and ability to provide reliable results.
