Tax Incentives

Learn more about tax credits included in the Inflation Reduction Act of 2022*

Inflation Reduction Act Overview

The Inflation Reduction Act of 2022 includes some advantages centered around insulation and air sealing that can elevate the overall coziness of your home and cultivate a healthier, more secure indoor atmosphere. These improvements also pave the way for substantial energy savings, effectively boosting your finances. By embracing these enhancements, you not only relish in the rewards of a more inviting and wholesome environment, but you also potentially elongate the lifespan of your home's heating and air conditioning systems, ensuring enduring comfort.

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ENERGY EFFICIENCY TAX CREDITS FOR EXISTING HOMES (25C)

This tax credit is accessible to homeowners who have paid or incurred qualified expenses to improve the insulation or air sealing at their main residence, with such improvements complying with the 2021 International Energy Conservation Code's specified criteria (IECC standard subject to change). This credit, amounting to 30% of the material expenses, is available annually, and is generally subject to a maximum limit of $1,200. Homeowners can apply for the tax credit using IRS Form 5695 and their materials invoice.

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BUILDER ENERGY EFFICIENT HOME TAX CREDIT (45L)

Effective January 1, 2023, eligible builders or property owners who meet specific energy efficiency and prevailing wage criteria can apply for a tax credit of up to $5,000 for newly constructed or renovated single and multi-family residences.

ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION (179D)

Section 179D presents a deduction opportunity for building owners, enabling them to claim up to $5.36 per square foot for energy-efficient buildings or the installation of energy-efficient systems. To be eligible, newly constructed or renovated buildings must satisfy specific energy reduction criteria and adhere to (or surpass) reference standards.

*This summary is intended to be a general overview of IRC §§ 25C, 45L, 179D and was developed for the convenience of our customers. It is not intended to and does not substitute for IRC §§ 25C, 45L, 179D, revenue procedures, revenue rulings, notices, announcements, any Treasury Regulations or any applicable federal law. Knauf Insulation (the “Company”) is not responsible for any errors or omissions contained in this summary. Applicable laws, regulations and Treasury guidance prevail over the content of this summary. Compliance with the requirements of IRC §§ 25C, 45L, 179D is the sole responsibility of the owner of any building for which the credit has been allocated. The Company is neither responsible for nor liable for an owner’s noncompliance. An owner should not rely solely on the Company to determine if the project and project records are in compliance. Use of this summary does not ensure compliance with IRC §§ 25C, 45L, 179D, Treasury regulations, or any other laws or regulations governing tax credits or the financial viability of any project. The Company accordingly strongly advises that all tax credit recipients consult their tax accountant, attorney or advisor as to the specific requirements of the tax credit program and IRC §§ 25C, 45L, 179D.