What this line means
The cost of qualified energy-efficient building envelope components installed in your principal residence. This includes insulation, exterior windows, skylights, and exterior doors that meet Energy Star Most Efficient criteria. The annual limit for building envelope components is $1,200 combined, with a sub-limit of $250 per exterior door (maximum $500 for all doors) and $600 for windows and skylights. Only your principal residence qualifies — not a second home or rental. 1
Does this apply to you?
- You installed new insulation materials in your principal residence during the tax year
- You replaced exterior windows or skylights with Energy Star Most Efficient certified products
- You replaced exterior doors with Energy Star Most Efficient certified models
- The products meet the specific energy efficiency standards required by the IRS
- The improvements were made to the home where you live most of the year
Easy to overlook
The $600 window sub-limit resets every year You can claim up to $600 for windows and skylights each year. If you need to replace 15 windows, you do not have to do them all at once. Replace some this year and more next year, claiming up to $600 each time. The annual reset makes it practical to spread large projects across multiple tax years. 1 IRS Form 5695 instructions — Line 15
Insulation materials include more than just fiberglass batts Spray foam, cellulose, rigid board, weather stripping, caulk, and house wrap all qualify as insulation materials if they meet the performance criteria. Homeowners who only think of traditional pink fiberglass miss credits on air sealing work. 2 IRS Fact Sheet 2022-40 — Energy Efficient Home Improvement Credit
Watch out for this
This line covers only building envelope components — the shell of your home. Heating and cooling equipment like heat pumps, central air conditioners, water heaters, and furnaces go on lines 16 and 17 instead. Mixing them up puts you in the wrong sub-limit category.
Also, the products must meet specific Energy Star certification levels. Standard Energy Star products do not always qualify — the IRS requires “Energy Star Most Efficient” certification for windows, doors, and skylights. Check the Energy Star website or the product’s certification label before claiming the credit. 1
Second homes and vacation properties do not qualify for Part II. This is different from Part I (the clean energy credit), which allows second homes. Part II is strictly for your principal residence.
Footnotes
-
IRS Form 5695 Instructions, Residential Energy Credits. https://www.irs.gov/pub/irs-pdf/i5695.pdf ↩ ↩2 ↩3
-
IRS Fact Sheet 2022-40, Inflation Reduction Act Provisions Related to Energy Efficient Home Improvement Credit. https://www.irs.gov/newsroom/energy-incentives-for-individuals-residential-property-credits ↩