The Ultimate Guide to the New Jersey Home Energy Tax Credit

Adding insulation and sealing air leaks is one of the best ways to improve your home’s energy efficiency and comfort. How do we know? We’re experts and make it our goal to make homes more efficient and comfortable all year long.

Thanks to home energy tax credits, now is one of the best times to install or upgrade your home’s insulation, especially in the attic. But how can you take advantage of home energy credits?

In this guide, you’ll learn everything you need to know about New Jersey Home Energy Tax Credits.

The Ultimate Guide to the New Jersey Home Energy Tax Credit

Table of Contents

New Jersey Home Energy Tax Credits: Home Improvements

In August 2022, the IRA amended two credits available for energy-efficient home improvements and clean energy equipment. This was to help them last longer and to help out more financially.

Energy-Efficient Insulation Improvements

Thanks to the home energy credit, you can now receive a tax credit of up to twelve hundred dollars, depending on when you had the insulation installed. If you added attic insulation in 2022 or before, you can receive up to ten percent of the cost of materials. If you installed insulation in 2023 or after, you can receive up to thirty percent of the charges, a maximum of up to $1,200 per year.

Insulation Rebates 2023

Under the new Energy Efficiency Electric Home Rebate Program Act, if you had insulation installed in 2023 or after, you can receive up to $1,600. However, this rebate amount is not guaranteed to everyone and depends on your household’s annual income.

You must earn one hundred and fifty percent less than the local median income to be eligible. In addition, your state energy office will need to administer the program, which can take some time.

The new program will roll out in late 2023, so if you have insulation upgrades planned, check with your SEO for current rebates.

Eligible Insulation Products

Certain insulation products qualify for the home energy tax credits. Bulk insulation products that qualify are:

  • Batt insulation
  • Insulation rolls
  • Blow-in insulation
  • Spray foam
  • Rigid boards

Products used for air sealing also qualify as long as they come with a Manufacturer’s Certification Statement. Air sealing products that qualify are:

  • Can spray foam
  • Weatherstripping
  • Air sealing caulk
  • House wrapping

Energy Star Seal and Insulate

You can seal air leaks and add insulation to make your home more comfortable and energy efficient. Making energy-efficient home improvements can save you up to ten percent on your home energy bills. You can use specific resources or contact a professional to air-seal your attic and install new insulation.

Why Seal and Insulate?

Attic insulation can help keep your home warm during the winter and cooler during the summer. When a professional correctly installs insulation, it can deliver you comfort and savings. Sealing air leaks can also help improve the overall comfort of your home and also do the following:

  • Reduce outside noises
  • Lower the amount of pollen, dust, or pests that enter your home
  • Increased humidity control
  • Lower the chance of ice dams

Many homes in the United States don’t have enough insulation and have a significantly high amount of air leaks. By sealing air leaks and adding insulation, you are taking two of the most energy-efficient ways to save money on heating and cooling costs. 

Tips for Claiming Home Energy Tax Credits

Here are some essential tips for claiming your home energy tax credits.

Get It in Writing

When claiming your home energy tax credits, you’ll want to ensure you keep documentation of the improvements you’re making to your property, such as new attic insulation. Proper documentation is essential to give the IRS proof that you’ve earned the home energy tax credit.

Keeping documentation is essential for any type of significant tax concern. Still, it’s also necessary because they calculate the credit as a percentage of what you’ve spent on the home improvement. For specific home improvements, you can get a home energy credit for up to ten percent of your costs and some up to thirty percent, so make sure you save your receipts.

Think Local

While federally, there are many tax breaks, many states also offer tax breaks to homeowners who want to make their homes energy efficient. Have you ever driven past someone’s home and asked them if they’ve received any local tax breaks for significant home improvements?

There are many tutorials you can find on the internet regarding home improvements, but it’s also an excellent idea to get a local perspective if possible. Asking around in your local area can sometimes provide recommendations for contractors, and they might have some advice on any programs that have helped save them money.

Know Your Limitations

Just because you’re looking for a home energy credit doesn’t mean you should commit to home improvements you can’t afford. Once you know your limitations on what you can spend, you’ll also know the limitations on tax savings! To learn more about home energy credit forms, you can refer to IRS form 5695.

The Bottom Line

The federal government offers specific incentives for homeowners to reduce the energy they consume when it concerns their homes. Home energy tax credits can reduce utility costs and earn you tax benefits.

Master Attic: Your Solution to Energy Efficiency

When you partner with Master Attic, we’ll make the insulation installation process effortless. If your home is eligible for upgrades with Master Attic, then don’t worry!

The work our professionals do help you towards your journey towards energy-saving results.

If you need new attic insulation and want to seal air leaks, call us today!

Frequently Asked Questions

Home energy tax credits are incentives the federal government offers to homeowners to invest in energy-efficient home improvements.

Home energy tax credits aren’t refundable, meaning you can get an excess credit on your tax return if you have more energy credits than your total tax.

In 2023, you can receive up to thirty percent in costs, up to twelve hundred dollars annually.

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