What is the Inflation Reduction Act?

And how it impacts your household

Energy Efficient Home
Improvement Credit

You may already be aware of the tax credits homeowners can claim on certain purchases. Essentially, you’ll be able to reduce your tax bill when you make energy-efficient upgrades to your home and appliances.


As of 2023, when you make qualified energy-efficient improvements to your home like insulation, windows, and other building changes, you can claim 30% of the cost!


The previous credit system (the Nonbusiness Energy Property Credit) had a $500 lifetime limit.

This has been replaced by a $1,200 annual limit*

The HOMES (Home Owner Managing Energy Savings)

Rebate Program

This program is designed to help provide cash back through reducing overall energy use in your household. By making home improvements such as adding insulation, you’ll earn money back based on how much you’re projected to save. This is determined by an energy audit with DOE-approved software. The amount you receive is determined by the amount of energy you’ve saved, your projected (modeled) savings, and household income.

There are 3 rebate amounts you can earn from, earning the lesser of either 50% of the project cost or the following:

Measured Energy Savings

<20%

up to $2,000 for 20% reduction of energy use

Measured Energy Savings

20-35%

$2,000

Measured Energy Savings

>35%

$4,000

High-Efficiency Electric
Home Rebate Program

Rebates within the HOMES program encourage homeowners to make environmentally conscious renovations. This will be offered to low-middle income households for certain purchases. If your total annual income is less than 150% of the median income in your area, you’ll qualify for rebates on energy-efficient renovations and appliances.



For insulation, air sealing, and ventilation, your household can get up to $1,600 in rebates for your purchases!

Interested in Learning More?

How Do I Qualify?

If you’re unsure where your home may qualify this tax season, there are a few resources you can use to find more information in your state. Your State Energy Office can also provide more information on incentives.

Inflation Reduction Act FAQs

  • What are the benefits of the IRA and credits from insulation?

    Upgrading your insulation helps to increase energy efficiency of your home. This  reduces your energy bills, while improving comfort and indoor air quality. The tax credits and rebates reduce the cost of improving your home’s energy efficiency.

  • How does the IRA focus on environmental impact?

    According to the EPA’s study on sources of greenhouse gas emissions, the commercial and residential sector was responsible for 13% in 2020. The IRA is projected to reduce pollution by 40% by 2023.

  • Which insulation products are eligible for the new insulation tax credits?

    Under the new insulation tax credits, a wide range of insulation products are eligible, including:

    • Spray foam insulation
    • Attic insulation
    • Batts
    • Rolls
    • Caulk designed to air-seal

  • How do I receive tax credits and rebates?

    To claim the insulation tax credit, you must fill out IRS Form 5695 and attach it to your federal tax return. Be sure to keep all receipts and documentation related to the insulation installation as proof.


    When filling out your tax forms, we recommend contacting a tax professional for assistance with Form 5695.

  • How do I know if my state offers additional rebates?

    Each state has rebate programs that help reduce the cost of certain home improvements. ENERGY STAR Rebate Finder gives you the ability to find your state’s programs by zip code. You can find insulation rebates in your area by filtering the search results to “Sealing and Insulation Products”.

Legal Disclaimer

Advanced Spray Foam of Tulsa does not provide legal, tax or accounting advice. The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations. All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice. You should consult your own legal, tax or accounting advisors before engaging in any transaction. The content on this website is provided “as is;” no representations are made that the content is error-free.

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