Home Energy Tax Credits – Phoenix, Arizona

Save Up to 30% with Home Energy Tax Credits

In 2023, you can get tax credits that cover up to 30% of the costs for home energy upgrades like adding insulation or installing a new heat pump. How much will you get? Start by giving us a call at (623) 581-5298, or reach out to schedule an appointment today.

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AZ Energy Efficient Home has won the ENERGY STAR Contractor of the Year – Sustained Excellence Award every year since 2016. No other contractor in the country has won the Contractor of the Year title more times than us.

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The Inflation Reduction Act and 2023 Energy Tax Credits

Here you’ll find answers to common questions about the Inflation Reduction Act (IRA) and tax credits for homeowners in Phoenix, Arizona.

A disclaimer:  We’re a home performance contractor, not an accountant.

This page is for informational purposes only. We do our best to provide the most accurate information available, but please talk with your accountant and financial advisor before making any transactions.

FAQs: Home Energy Tax Credits and Rebates in Phoenix

I want to claim my home energy tax credit. What’s the first step?

Give us a call at (623) 581-5298, or reach out to schedule an appointment. One of our consultants will help you find the best opportunities to save money on your energy bills and your tax returns.

Tax Credit vs. Tax Deduction vs. Rebate

An energy tax credit reimburses people and businesses for investing in energy-saving and renewable energy technologies. It either reduces the amount of federal income tax owed or gets added to a refund.

Tax Credits and Tax Deductions

Tax credits and deductions both reduce the amount owed in taxes, but differently. A deduction lowers taxable income, thus reducing the amount due. A credit, however, directly cuts your tax bill dollar-for-dollar and can even increase the size of your refund.

Tax Credits and Rebates

 Home energy tax credits are claimed when federal income taxes are filed. Rebates or cash incentives are paid out more quickly, usually a few weeks after the project is completed.

There are currently no federal rebates for home energy efficiency upgrades, but you can access rebates here in Arizona through either APS or SRP.

Inflation Reduction Act Tax Credits in Arizona

Starting in 2023, you can claim up to 30% (a maximum of $1,200 each year) for energy upgrades like adding insulation or swapping out windows and doors, plus an additional 30% up to $2,000 for heat pump technologies. 

Here’s how the tax credits break down for specific categories:

    1. $150: Home energy audits are eligible for a $150 credit.
    2. $250: Exterior doors that meet ENERGY STAR requirements may qualify for a $250 credit with a maximum credit of $500 for all exterior doors.
    3. $600: Qualifying exterior windows and skylights that meet ENERGY STAR’s most efficient certification may qualify for a $600 credit.
    4. $600: Get $600 for other qualified energy property, including central air conditioners; electric panels and certain related equipment; natural gas, propane, or oil water heaters; oil furnaces; water boilers.
    5. $2,000: Heat pumps and heat pump water heaters, as well as biomass stoves and boilers, may qualify for a $2,000 credit, and this category is not subject to the annual $1,200 total credit limit or the $600 limit on other qualified energy property.
    6. Roofing improvements no longer qualify for a tax credit.

Check out this straightforward overview from the IRS for details.

Every home is different. To learn more about the tax credits you can claim, please give us a call at (623) 581-5298, or reach out to schedule an appointment. We’re happy to help.

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How often can I claim tax credits through the IRA?

Previously, homeowners were only able to claim a total tax credit of $500 for all years combined from 2006 to 2022.

However, with the implementation of the IRA, tax credits are now renewed annually, and the amount that can be claimed has significantly increased.

This means that homeowners can now receive up to $3,200 in tax credits for the year 2023, and the same amount for the year 2024 and so on.

How to plan for IRA tax credits in Phoenix?

We now have big tax breaks for insulation, heat pumps, and so much more through the Inflation Reduction Act (IRA).

Where do you even begin?

Start by giving us a call at (623) 581-5298 to make a plan. 

If you wait too long to make a plan, you could find yourself in a pinch. Furnaces and water heaters fail all the time, and getting the system you want could take weeks.