The Internal Revenue Service (IRS) will release Revenue Procedure 2024-31 on November 12, 2024, introducing significant changes to tax credits related to energy-efficient home improvements. These changes will impact both manufacturers and taxpayers (consumers). This guide provides essential information for each group to help you understand and prepare for the upcoming requirements.
For Taxpayers
What Products Are Affected?
Under Section 25C of the Internal Revenue Code, taxpayers can claim tax credits for certain energy-efficient home improvements. Starting in 2025, only products produced by Qualified Manufacturers (QMs) and assigned a Product Identification Number (PIN) will be eligible. Examples of eligible products include:
Insulation Materials:
Products that improve the thermal performance of your home.
Examples: Fiberglass insulation, spray foam insulation.
Possible Manufacturers: Owens Corning, Johns Manville.
Energy-Efficient Windows and Doors:
Exterior windows, doors, and skylights meeting ENERGY STAR requirements.
Examples: Double-pane or triple-pane windows, insulated exterior doors.
Possible Manufacturers: Andersen Windows, Pella Corporation, Marvin Windows and Doors.
High-Efficiency Heating and Cooling Systems:
Systems that meet specific energy efficiency criteria.
Examples: Heat pumps, central air conditioners, advanced furnaces.
Possible Manufacturers: Carrier, Trane, Lennox, Rheem.
Energy-Efficient Water Heaters:
High-efficiency electric or gas water heaters.
Examples: Electric heat pump water heaters, high-efficiency gas storage water heaters.
Possible Manufacturers: A.O. Smith, Bradford White, Rheem.
Qualified Roofing Materials:
Materials designed to reduce heat gain.
Examples: Metal roofs with appropriate coatings, asphalt roofs with cooling granules.
Possible Manufacturers: CertainTeed, GAF.
Important Considerations for Taxpayers
Purchase from Qualified Manufacturers:
Ensure the product is made by a Qualified Manufacturer (QM) starting in 2025.
Verify that the product has a Product Identification Number (PIN).
Include PIN on Tax Return:
You must include the product's PIN on your tax return to claim the credit.
How to Verify Product Eligibility:
Ask the Retailer or Manufacturer: Confirm that the product is eligible for the tax credit.
Check Product Labeling: Look for the PIN on the product or packaging.
Maintain Records:
Keep receipts and documentation, including the PIN, for your tax records.
Maximizing Your Tax Benefits
Confirm Energy Efficiency Standards:
Ensure the product meets the IRS-defined energy efficiency criteria.
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