Year-end deadline nears for federal tax credits on energy-efficient home upgrades

CHELAN COUNTY — Homeowners have a few more months to make energy upgrades utilizing federal tax credits. Eliminated in the One Big Beautiful Bill Act, the credits will only be available for upgrades made through the end of the year.

Energy efficient home improvements made through Dec. 31 can be eligible for a federal tax credit of up to $3,200. The credit equals 30 percent of certain qualified expenses, including energy efficiency improvements, residential energy property, and home energy audits. 

Up to $1,200 can be claimed for energy efficient property costs and improvements, such as insulation, exterior doors, windows and home energy audits (with limits on individual upgrades). Additionally, up to $2,000 can be claimed for qualified heat pumps, water heaters, and biomass stoves or boilers.

For homes heated with electricity, the federal tax credits may be paired with Chelan PUD’s rebates to maximize savings. Related PUD rebates include up to $4,000 for heat pump conversion, $1,000 for heat pump water heaters, up to $2.50 per square foot for insulation, up to $25 per square foot for windows, and $100 for entry doors. These rebates are not affected by federal changes.

The federal residential clean energy credit is also in effect through Dec. 31, which provides a 30 percent credit for homeowners installing clean energy systems such as solar panels, wind turbines, and geothermal heat pumps.

The credits are managed by the U.S. Internal Revenue Service (IRS) and can be claimed with federal income taxes for the year in which the upgrades are made. The credit cannot exceed the amount owed in taxes, and excess credit cannot be applied to future tax years. Homeowners should consult with tax professionals and contractors for guidance on qualified upgrades and claims. Questions about Chelan PUD rebates can be directed to Customer Energy Solutions by email: conservation@chelanpud.org, or by phone: (509) 661-8008.

Taylor Caldwell: 509-433-7276 or taylor@ward.media