Federal tax credits created through the Inflation Reduction Act (IRA) to help people make their homes more energy efficient can help Oregonians save even more this tax season.

The credits cover many of the same home energy upgrades that Energy Trust offers cash incentives for, meaning customers can claim tax credits in addition to getting Energy Trust incentives for upgrades made in 2023.

Understanding the details of the tax credits and incentives is key to taking advantage of all available savings. Home improvements that qualify for tax credits through IRA include:

• Insulation: Adding or upgrading insulation to walls, attics and floors can help keep conditioned air in, meaning your heating and cooling system works less.
• Windows and doors: Installing efficient windows and doors helps keep air in and your home more comfortable.
• Home energy audit: An energy “checkup” for homes. An energy auditor inspects the home, using tools that monitor temperature and moisture. Afterward, a report will detail how well the home is using energy and where it’s being wasted.
• Heating and cooling: Heating your home is likely your largest home energy expense. Energy-efficient heating and cooling systems like heat pumps help keep costs low.
• Water heating: Water heating is likely your second largest energy expense. Energy-efficient options like heat pump water heaters use far less energy and lower bills.
• Solar and storage systems: With solar, the home creates its own energy. Adding a battery allows energy to be stored and used during power outages.
• Roofing: Certain roofing materials reflect more sunlight and absorb less heat, meaning homes stay cooler.

How to claim the federal tax credits

For all improvements, receipts and any manufacturer’s certification statements are required when claiming tax credits. When filing your 2023 tax return:

1. Fill out Form 5695: This is the tax form used to claim credits and is available through the IRS website or tax preparation software.
2. Fill in the details: Enter the costs of the energy-efficient improvements in the corresponding sections.
3. Attach to your tax return: Once completed, attach Form 5695.
4. Consult a professional: Consider consulting a tax professional to help maximize your benefit.

There is an annual cap on federal home energy tax credits of $1,200, with sub-caps on individual items. Details are available here.

The cap does not apply to a $2,000 tax credit for a heat pump or heat pump water heater. If you installed either a heat pump or heat pump water heater in 2023, you can claim $2,000 for those qualifying product(s) and an additional $1,200 for any other qualifying upgrades.

If you installed solar panels or battery storage in 2023, you may qualify for state rebates along with Energy Trust incentives and a federal tax credit.

More information about federal tax credits, Energy Trust incentives and where to start for energy saving at home are available on Energy Trust’s website:

• How to combine new home energy tax credits with Energy Trust incentives
• Why weatherization is the first step you should take to enhance your home’s energy efficiency.
• How home energy audits lower your monthly bills
• Find the right heating, cooling for your home to save energy and lower costs
• Save more in 2024 with larger incentives from Energy Trust