Home Improvement Tax Credits and Rebates Available To Homeowners In Tallahassee

Save $840 on an induction stove, $4000 on rewiring your home, $840 on a new dryer and more.

Home Improvement Tax Credits

Home improvement tax credits and rebates have been around for a long time. The City of Tallahassee is well known for it’s rebates on energy efficient upgrade rebates.

But the recently passed Inflation Reduction Act, or IRA, provides some outstanding opportunites to save on remodeling costs. 

City of Tallahassee rebates, grants and Loans

The City of Tallahassee has a number of rebate programs to save on appliance purchases and home improvements.

Energy Efficiency Rebates:

Save on Air conditioners, water heaters, and heat pump appliances.: https://www.talgov.com/you/you-products-home-hvac-rebates. 

Energy Star Appliance Rebates

Save on dishwashers, refrigerators, pool pumps, and more.: https://www.talgov.com/you/you-products-home-es-rebates.

Energy Star Home Rebates

Save $1 a square foot, up to $2000 on a new home: https://www.talgov.com/you/you-products-home-es-home-rebates.

Natural Gas Appliance Rebates:

Save on gas ovens, ranges, water heaters, gas dryers and more: https://www.talgov.com/you/naturalgas-rebates

City of Tallahassee Grants and Loans

The City of Tallahassee also has a number of grant programs to help cover the cost of insulation, sewer upgrades, energy retrofits and more. 

The city also has low interest loan programs for things like window replacement and sewer connection. 

See the full list of grants, rebates and loans here: https://www.talgov.com/you/you-products-home-index#rebates

Rebates availble for washers, dryers and tankless hot water heaters 

A Shortcut To Find Your Tax Credits from the INflation Reduction Act

Rewire America is the leading electrification nonprofit in the US working to update our homes, businesses, and communities. 

They created an easy to use calculator to find tax credits you are eligble for. 

Use Their Tax Credit Calulator here:

https://homes.rewiringamerica.org/calculator

Home Improvement Tax Credits & Rebates

The Inflation Reduction Act, passed in 2022 offers a lot of tax credits and rebates for home improments. If you want to read the act in detail you can see it here: https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/

Tax Credits:

Here are the major tax credits and rebates offered by the Inflation Reduction Act to incentivize clean energy and home electrification:\.

To claim these credits you need to file the proper tax forms, like Form 5695, Residential Energy Credits Part II, with your tax return.

• Residential Clean Energy Tax Credit: 25D (30% Available Now): This credit covers 30% of the cost of installing qualifying clean energy systems in your home, including solar panels, solar water heaters, fuel cell property expenditures, small wind turbines, geothermal heat pumps, and battery storage systems.

• Energy Efficient Home Improvement Credit: 25C (Up to $3,200 Available Now): This credit covers up to 30% of the cost of qualifying energy-efficient home improvements, including heat pumps, heat pump water heaters, biomass stoves, insulation, exterior doors, exterior windows and skylights, and electrical panel upgrades. The maximum credit amount is $2,000 for heat pumps, heat pump water heaters, or biomass stoves. You can claim up to $1,200 for the remaining improvements.

• New Electric Vehicle Tax Credit: 30D (Up to $7,500 Available Now): This credit covers up to $7,500 of the cost of purchasing a new electric vehicle. The credit amount depends on the vehicle’s battery capacity and where it was assembled. To be eligible for the credit, your modified adjusted gross income must be less than $150,000 for single filers or $300,000 for joint filers. The vehicle’s manufacturer suggested retail price must be less than $55,000, or $80,000 for vans, SUVs, and pickup trucks. To claim the credit, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, with your tax return. You can also transfer this credit to a dealership as a point-of-sale rebate to directly lower the price of the vehicle at the time of purchase.

• Used Electric Vehicle Tax Credit: 25E (Up to $4,000 Available Now): This credit covers 30% of the sale price of a used electric vehicle, up to a maximum of $4,000. The vehicle must have a manufacturer’s suggested retail price of less than $25,000 and be at least two years old. Your modified adjusted gross income must be less than $75,000 for single filers or $150,000 for joint filers. You must purchase the vehicle from a licensed dealer. To claim the credit, you must complete Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, and file it with your tax return. Beginning in 2024, taxpayers can transfer this credit as a point-of-sale rebate to directly lower the price of the vehicle at the time of purchase.

• Electric Vehicle Charger Tax Credit: 30C (Up to $1,000 Available Now): This credit covers 30% of the cost of purchasing and installing an electric vehicle charger at your home, up to $1,000. To be eligible, you must reside in an eligible lower-income or rural census tract. The credit can be used for Level 2 chargers and bidirectional chargers, which can be used to power your home during a power outage. To claim the credit, complete Form 8911, Alternative Fuel Vehicle Refueling Property Credit, and file it with your tax return.

• Federal Income Tax Credits for Efficiency Upgrades: These credits cover 30% of the project costs for qualifying improvements to your primary residence. Qualifying improvements include the installation of a heat pump for heating and cooling, a heat pump water heater, attic insulation, sealing, new windows, and upgrades to your electrical panel. There are no income limits for these credits, but annual limits on the credit amounts exist.

Rebates:

• High-Efficiency Electric Home Rebate Program (HEEHRA) (Up to $14,000, Rollout Timing TBD): This program provides rebates to low- and moderate-income households for the purchase and installation of ENERGY STAR-certified electric appliances. The rebate amount depends on your income level and the type of appliance. Rebates are available for heat pump air conditioners and heaters, heat pump water heaters, electric stoves, ovens, and ranges, heat pump clothes dryers, upgraded electric panels, upgraded electric wiring, and weatherization. The maximum rebate amount is $14,000.

• Home Owner Managing Energy Savings Rebate Program (HOMES) (Up to $8,000, Rollout Timing TBD): This program provides rebates to homeowners who make energy-efficient home improvements that reduce energy use by a certain percentage. The rebate amount is not income-restricted and depends on the percentage of energy savings achieved. The maximum rebate amount is $8,000 for most households. Low-income households can receive up to 80% of project costs, with a maximum rebate of $8,000.

Important Considerations

• You cannot receive rebates from both the HEEHRA and HOMES programs for the same project. However, pending DOE guidance, it is expected that you will be able to combine a rebate from either of these two programs with a tax credit for the same project.

Tax Credits vs. Tax Deductions: Understanding the Difference

Generally speaking tax credits are more benficial than tax deductions. 

• Tax Credits: Directly reduce the amount of taxes you owe, dollar for dollar. For example, a $1,000 tax credit lowers your tax liability by $1,000. They are generally more beneficial than deductions because they offer a direct reduction in your tax bill.

• Tax Deductions: Reduce your taxable income, which then lowers your overall tax liability. The value of a deduction depends on your tax bracket. For example, if your tax bracket is 22%, a $1,000 deduction will reduce your tax liability by $220 ($1,000 x 0.22)

Note: This not intended to substitute for professional financial advice. You should consult with a tax professional to determine your eligibility for these credits and rebates.