Energy-Efficient Improvements to Save Money When Filing Taxes

Going green can make your home more energy efficient, and certain tax credits can also help you save money when you file your return. These credits can reduce your tax bill dollar-for-dollar, so it’s well worth while to see if you qualify.

In this guide, we outline energy-efficiency credits, including how much they’re worth, the requirements to claim them, and when they expire. Since these credits are impacted by the One Big Beautiful Act, it’s important to the changes and deadlines.

Key takeaways

• There are several tax credits available to those who make an effort to be energy efficient at home or when they drive.
• Energy-efficient home improvements must be installed and in service by December 31, 2025, to apply for a credit.
• Qualifying electric vehicles must be purchased by September 30, 2025, to qualify for the EV tax credit.
• To claim a credit for an electric vehicle charger, it needs to be installed by June 30, 2026.

Clean Vehicle Credit 

Not only can you save money by not having to purchase gas with your electric car, but the Clean Vehicle Credit is a dollar-for-dollar credit that can reduce taxes you may owe and potentially lower your taxes owed by up to $7,500.

Under the Inflation Reduction Act, people who purchased new electric vehicles are eligible for a tax credit of up to $7,500. Also, starting January 1, 2023 through September 30, 2025, people who purchase used electric vehicles for $25,000 or less may be eligible for a credit of 30% of the sale price up to $4,000, depending on their income.

Most of the changes to electric vehicle credits under the Inflation Reduction Act are effective with electric vehicles purchased starting January 1, 2023 and ending on September 30, 2025. There are income, manufacturer sales price, and final assembly requirements for both new and used electric vehicles.

This credit was sunset as part of a larger policy change made by the One Big Beautiful Bill Act (OBBBA), which passed on July 4, 2025. Purchases must have been made by September 20, 2025 to qualify.

Credit for Electric Chargers Installed at Your Home or Business

If you equipped your home or business with electric chargers, you may be eligible for the Alternative Fuel Vehicle Refueling Property Credit to reduce your tax liability.

As of January 1, 2023, the credit for qualified refueling property subject to depreciation equals 6% with a maximum credit of $100,000 for each single item. If a business meets certain wage and apprenticeship requirements, they may be eligible for a 30% credit with the same $100,000 limit.

For qualifying property not subject to depreciation, you  may be eligible for a credit of 30% of the cost for a maximum amount of $1,000 per item.

For property placed in service before January 1, 2023, the credit is 30% of the cost of qualified refueling property with a maximum total credit of $30,000 per location for depreciable property and $1,000 per location for all other property.

If you want to take advantage of this credit, you’ll need to do so by June 30, 2026, due to policy changes established by the OBBBA.

Residential Clean Energy Credit

The Residential Clean Energy Credit is available if you make energy-saving improvements to your home and offers a credit worth up to 30% on purchases of energy-efficient equipment.

While this credit was originally set to last from January 1, 2022, through December 31, 2032, the OBBBA has implemented a change that will sunset this credit as of December 31, 2025. This means that any improvements you were hoping to claim the credit for will need to be fully installed by that date.

The improvements could include amounts spent on:

• Battery storage
• Fuel cells
• Solar water heaters
• Solar power (the photovoltaic panels you are starting to see on roofs)
• Wind turbines

If the credit is more than your total tax bill for the entire year, the remainder of the credit can be carried forward to next year, but it won’t increase your refund. The credit is nonrefundable only, meaning it can only reduce your tax liability. The installation of these systems must be in the US and in your main home or in a second home that is used as your residence.

Some states have their own credits or rebates, which help to offset the cost of certain improvements Check out the Database of State Incentives for Renewables & Efficiency to see if there are additional savings available to you.

A tax credit alone is rarely a good reason to make an improvement, but the credit may tip the scales in favor of certain energy-efficient improvements, or make a good deal better.

Home energy audits 

A home energy audit is a written report used to identify potential cost-effective energy improvements for your home. The credit amount is equal to 30% of the total amount paid during the year for a home energy audit. The maximum credit that can be claimed for home energy audits is $150 (30% credit on audits that cost up to $500).

This credit is nonrefundable, which means that it will reduce the amount you owe to the IRS down to zero, but any remaining credit won’t be refunded to you.

Some things to note about your home energy audit:

• Must include an estimate of the energy and cost savings each improvement would provide
• Should be performed by a qualified home energy auditor and state in the written audit report that the auditor is certified to conduct home energy audits 
• The report must provide the auditor’s name, the auditor’s employer identification number or other taxpayer identification number, and the name of the qualified certification program of the auditor. It must also be signed by the auditor.

Non-business energy property credit (energy efficient home improvement credit)

Prior to the Inflation Reduction Act, the Non-Business Energy Property Credit, which has now been renamed the Energy Efficient Home Improvement Credit, was worth 30% of the cost and gave taxpayers up to a $500 lifetime limit on qualified energy-efficient items installed in their homes, like qualified insulation, windows, doors, and roofs, through December 31, 2022.

As a result of the Inflation Reduction Act, the credit is now worth up to $1,200 per year for a qualifying property placed in service on or after January 1, 2023.  Due to the OBBBA, this property must also be placed in service on or before December 31, 2025.

If you make qualified investments in heat pumps and biomass stoves and boilers, you could also receive up to an additional $2,000 per year. This means you could qualify for a total tax credit of up to $3,200 per year, from January 1, 2023 to December 31, 2025.

However, this credit is nonrefundable, which means the credit won’t directly increase your refund.

Do not miss out on these ways to save on your return

Do the math and see if going ‘green’ is not just good for the planet, but for your wallet, too.

No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.