[Please note! We here at Havelock Wool are wool experts, not tax experts! If you have any questions on this tax credit please do your own research and/or consult with a tax professional]
Did you know may be able to get up to 30% back ($1,200 max) on the cost of Havelock Wool residential insulation per the IRS 25c tax credit?
Here is what you need to know
Starting in 2023 the federal government established the 25c tax credit to encourage energy efficiency by reducing the amount of taxes you owe if you install qualifying upgrades in your existing home in the United States. This includes building envelope components (insulation!), home energy audits, residential energy property and heat pumps.
The tax credit is 30% of qualified expenses and the maximum credit you can claim each year is $1,200 for building envelope components, energy property costs, and certain energy-efficient home improvements. $2,000 per year is the max for qualified heat pumps, biomass stoves, or biomass boilers. The credit has no lifetime dollar limit and you can claim the maximum annual credit every year that you make eligible improvements until 2033.
Details on the tax credit for insulation.
If you installed Havelock Wool in your existing home in 2023, you can likely file for a tax credit.
Details include :
- you can get 30% back on the cost of wool with a $1,200 cap for the year it was installed (not purchased)
- labor costs for installing insulation do not qualify for the credit
- the insulation must reasonably be expected to last for at least 5 years
- Best efforts should be made to meet the insulation levels set by the 2021 IECC standard. The credit does not require third-party certification of compliance
How to get the tax credit :
The process is straightforward and involves filling out IRS Form 5695. Line 19a is where you put the details on your insulation cost. An example of the form is attached HERE.
Some other helpful links :
Official IRS explanation of 25c
IRS FAQs about Energy Efficiency Rebates
[Please note! We here at Havelock Wool are wool experts, not tax experts! If you have any questions on this tax credit we recommend doing your own research and/or consulting with an accountant. ]
Does this tax credit apply to Canada ?
It does not. Consult your Canadian tax code to see if there are any rebates available. Thanks!
Do you know if tax credit applies to new construction?
For the energy efficiency home improvement credit, the home must be an existing home that you improve or add onto, not a new home.
In most cases, the home must be your primary residence (where you live the majority of the year). You can’t claim the credit if you’re a landlord or other property owner who doesn’t live in the home.
See all details here : https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
Thanks!
Are the International Energy Conservation Code (IECC) standards something that your company has been approved as meeting? I don’t know if there is some agency that keeps track of which insulation qualifies
Hi Juniper – IECC includes specific requirements for building insulation and thermal performance, it does not typically prescribe specific types or brands of insulation materials to be used. Instead, it sets performance standards that buildings must meet in terms of thermal resistance (R-values) and other energy-related criteria. Thanks!
I had to do more research, & now understand that you couldn’t give me a simple yes/no: because it depends on the climate & insulation needs of my particular location. That said, in Wisconsin an R20 wall insulation is the level needed to qualify for the credit. So, 4″ of wool in my wall (which is what I am dealing with in an old building rehab) will not qualify. I can either add 2″ of XPS or frame additional depth on my wall.
Are you saying that every year after installing your product I can claim it my taxes up until the cut off time?
Nope! “you can get 30% back on the cost of wool with a $1,200 cap for the year it was installed (not purchased)”
see here for all details : https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
Thanks!