“The new credit increases from 10% to 30%, of qualified energy-efficient improvements and residential property expenses. It also removes the $500-per-person lifetime credit limit; giving you, the taxpayer, a maximum credit limit of $1,200 per year. The limit per qualifying item is generally $600 ($250 per exterior door up to $500 for all exterior doors).

The new provision also made the following changes:

  • Roofs no longer qualify, but air sealing insulation does.
  • You can claim the credit for not only a primary residence, but also a secondary one.
  • Beginning in 2025, you should include the product ID on tax forms to claim the credit. The credit is still claimable on Form 5695.”

 

https://www.hrblock.com/tax-center/filing/credits/qualifying-for-the-nonbusiness-energy-property-credit/

 

Now imagine you had the following qualified energy efficient home improvement expenses in 2023.  These calculations show exactly how you would be limited for 2023.

As you see in the example, you will hit the max energy tax credit for 2023 of $1,200.  Please be advised, there is no carryover to the next year.