The Energy Efficient Home Improvement Credit

Since 2006, Evergreen Home Performance has been working with Maine homeowners to provide custom solutions that improve home comfort and energy efficiency. Part of this commitment to our community means staying up-to-date with ways our customers can save on insulation, basement waterproofing, and other essential services for our variable climate.

A recently-enhanced federal tax credit allows eligible homeowners to receive a federal tax credit of up to $1,200 annually for upgrades like insulation, air sealing, and energy audits—here’s everything you need to know.

How the Tax Credit Works

The Energy Efficient Home Improvement Credit, sometimes known as the 25C tax credit, is a powerful incentive that makes home upgrades more affordable. A tax credit reduces the amount of taxes you owe—as long as you owe the federal government money for the year in which your qualifying home upgrades were made, you can benefit!

The Tax Credit at a Glance

• Equal to 30% of the total cost for qualifying home improvements

• Annual maximum credit of $1,200 for insulation and air sealing

• Available now through 2032

When you go to file your taxes for the year in which your tax-credit-eligible home upgrades were completed, you (or your tax professional) simply fill out IRS Form 5695. We’ll supply you with an itemized invoice that includes all of the expenses eligible for the tax credit—that’s all you’ll need to file and receive your credit!

It's important to note that this tax credit only applies to federal taxes, not state taxes.

What Qualifies for the Energy Efficient Home Improvement Credit?

Many of the services we offer at Evergreen Home Performance are eligible for this 30% tax credit, including: 

• Energy Audits (up to $150 maximum credit)

• Attic, Wall, and Basement Insulation 

• Air Sealing

To be eligible for this tax credit, the work has to meet specific federal guidelines. But you can leave the details to the BPI-certified team at Evergreen—as long as your home upgrade project is a good candidate for the Energy Efficient Home Improvement Credit, we’ll make sure you qualify!

Benefits of the Tax Credit

Taking advantage of this tax credit means you'll see all the benefits of improving your home's energy efficiency: lower energy bills, improved comfort, and a reduced environmental impact. But there are additional benefits unique to this specific tax credit:

• Available to Anyone With Federal Tax Liability - If you pay federal taxes, you can claim your insulation tax credit! 

• Can Be Combined With Other Incentives - The tax credit can be combined with other incentives, like Efficiency Maine rebates.

• Calculated Separately From Heat Pump Upgrades - You can take both a $1,200 insulation tax credit and a $2,000 heat pump tax credit in the same year, for as much as $3,200 in total tax credits!

Ready to Evergreen Your Home?

Whether you're seeking a cozier winter, fewer allergens, or lower energy bills, Evergreen Home Performance is here to collaborate with you on custom solutions for your home. Our BPI-certified building scientists will conduct a comprehensive energy audit, identify the most effective insulation and air sealing strategies, and find incentives to make your upgrades more affordable. We're committed to helping you create a more comfortable, efficient, and sustainable living space.

Start your journey to a more efficient home with Evergreen Home Performance. Call 207-594-2244 or contact us online to schedule your free energy consultation and learn more about tax credits and incentives.