Tax Prep: Yes, It’s That Time of Year
It’s tax season. If you made any energy efficiency improvements to your existing home (owned or rented) in the past year (2024) you might have a tax credit that you can claim!
Home Energy Efficiency Improvements
Taxpayers can claim federal tax credits up to $2,000 for new heat pumps or biomass heating, plus up to $1,200 for certain new energy efficiency expenses (so, potentially up to $3,200 in total). The credit equals 30% of costs paid for “qualifying” improvements, which in general means products meeting Energy Star or similar efficiency standards.
Up to $2,000 total for new heat pumps or biomass heating:
Heat pumps (electric or natural gas)
Heat pump water heaters (electric or natural gas)
Biomass stoves and boilers
Includes labor costs
Up to $1,200 total for new energy efficiency expenses:
Exterior doors up to $250/door and $500 total
Exterior windows and skylights up to $600 total
Insulation and air sealing up to $1,200
Energy Audits up to $150 (written report by qualified auditor)
Central air conditioning, high-efficiency furnaces or water heaters, and electrical service upgrades up to $600/item and $1,200 total (with labor)
*Important: You need to owe federal taxes in 2024 to use the above credits; they cannot be “carried forward” to use in future years. But, “new” credits are available every year until 2032, so qualifying costs in 2025, 2026, etc. also will count.
Solar Panels, Home Batteries, and Geothermal Systems
Taxpayers can claim a federal tax credit equal to 30% of the total costs (materials and labor) spent on installing new solar panels, home batteries, and geothermal systems (also small wind and fuel cells). There is no “cap” on the credit amount, so any amount not used is “carried forward” and can offset taxes for up to 10 years.
Taxpayers also can claim an additional New York State tax credit up to $5,000 for costs of installing new solar panels or a geothermal system. The tax credit equals 25% of project expenses, including both materials and labor.
Electric Vehicle Charging Equipment
Taxpayers can claim a federal tax credit up to $1,000 (per charging port) for installing electric vehicle charging equipment. The credit equals 30% of costs, which can include certain related electrical work (e.g., a new panel), as well as labor.
How Do You Make Your Claim?
For federal taxes, you’ll complete IRS Form 5695, and for New York taxes, you’ll complete Form IT-255. In both cases, include the form with your tax return to claim the credit.
Things to keep in mind include:
Keep copies of ALL receipts, reports and other supporting documentation
Utility rebates and other incentives must be subtracted first before calculating the amount of any tax credits.
Please be sure to consult your financial, legal or other tax advisor before claiming tax credits. We are energy folks, but not certified financial planners, lawyers or CPAs.
If you are interested in pursuing energy efficiency savings, please contact your North Country Clean Energy Hub Energy Advisor for more information.
Free Tax Help
There are a few services that offer trusted and knowledgeable free tax preparation and guidance across the North Country.
An IRS-sponsored program that assists middle and low-income workers, called VITA (Volunteer Income Tax Assistance), is available to have both federal and state personal income taxes prepared and filed. VITA also offers technical assistance to make sure workers receive all the tax credits they are entitled to. There is at least one VITA location in each NYS county. To find your nearest location, enter your zip code here.
Additionally, United Way of the Adirondack Region has partnered with community organizations to provide other free tax preparation services. These services can be found in Clinton, Essex, and Franklin Counties. To learn about available times and locations to visit, click here.
Lastly, Massena is offering tax preparation service offered by AARP (not just limited to elders) at the Massena Community Center, 61 Beach St., on Mondays and Tuesdays from Feb. 5-April 15 from 8:30 a.m. - 12:30 p.m. Tupper Lake workers can call for an appointment. Read more about it here.
