What the 2024 energy tax credit covers

The Inflation Reduction Act energy tax credit lets you deduct money from your federal income tax for certain appliances you buy and install in your home. The appliances that count are those that reduce energy use: heat pumps, water heaters, stoves, ovens, clothes dryers, dishwashers, and heat pump clothes dryers. You claim the credit on your tax return for the year you installed the appliance, not the year you bought it.

The credit amount varies by appliance type. Some have a flat dollar amount — for example, a may have access to electric heat pump water heater gives you up to $3,750. Others, like ENERGY STAR certified dishwashers, give you a percentage of what you paid, up to a cap. The appliance must be new, not used, and must meet specific efficiency standards set by the Department of Energy.

You do not need to own your home to claim the credit — renters can claim it too, as long as they installed the appliance themselves. If your landlord installed it, your landlord claims the credit, not you.

Key Takeaways

  • may have access to appliances include electric heat pumps, heat pump water heaters, electric stoves and ovens, heat pump clothes dryers, ENERGY STAR dishwashers, and electric heat pump pool heaters.
  • The appliance must be new and meet Department of Energy efficiency standards; used appliances do not count.
  • You claim the credit in the tax year you installed the appliance, not when you purchased it.
  • Renters can claim the credit if they installed the appliance themselves; landlords claim it if they installed it.
  • Credit amounts range from a flat dollar amount (like $3,750 for a heat pump water heater) to a percentage of the purchase price, depending on the appliance type.

Heating and cooling equipment that qualifies

Electric heat pumps for heating and cooling your home may have access to for up to $2,000. The heat pump must be ENERGY STAR certified and installed in a home that was built before January 1, 2024. If you are replacing an existing heating or cooling system, the heat pump must have a Seasonal Energy Efficiency Ratio (SEER2) of at least 16 and a Heating Seasonal Performance Factor (HSPF2) of at least 8.

Heat pump pool heaters also may have access to, with a credit of up to $2,000. These must be ENERGY STAR certified and installed in a residential pool or hot tub. A ground source heat pump — which pulls heat from the earth rather than the air — qualifies for up to $3,000 if it meets the same efficiency standards as an air-source heat pump.

Central air conditioners that are not part of a heat pump system do not may have access to. The credit is only for heat pumps, which both heat and cool, or for ground source systems.

Water heaters and cooking appliances

An electric heat pump water heater qualifies for up to $3,750. It must have an Uniform Energy Factor (UEF) of at least 2.7 and be installed in a home built before January 1, 2024. A standard electric resistance water heater does not may have access to — only heat pump models do.

Electric stoves, ranges, and ovens may have access to for up to $840 if they are ENERGY STAR certified. This includes both freestanding ranges and built-in wall ovens. Gas stoves and ranges do not may have access to, even if they are high-efficiency models. Cooktops and wall-mounted ovens must be purchased as a single unit to count as one appliance for the credit.

Induction cooktops may have access to separately from ovens. An induction cooktop that is ENERGY STAR certified can give you up to $840. If you buy an induction cooktop and a separate electric oven, you can claim the credit for both as separate appliances, up to the annual cap of $1,600 for all appliances combined.

Clothes dryers and dishwashers

A heat pump clothes dryer qualifies for up to $2,000. It must be ENERGY STAR certified and installed in your home. Heat pump dryers use significantly less energy than standard electric or gas dryers because they recycle hot air instead of venting it outside. A standard electric or gas dryer does not may have access to, even if it is a newer model.

An ENERGY STAR certified dishwasher qualifies for a credit equal to 15 percent of the purchase price, up to $200. The dishwasher must be new and installed in your home. Built-in and portable models both count. Dishwashers that are not ENERGY STAR certified do not may have access to.

Annual credit limits and how they work

You can claim a total of $1,600 per year across all appliances combined. This means if you install a heat pump water heater for $5,000 and claim $3,750, you have $1,600 minus $3,750 remaining — which is negative, so you cannot claim any additional appliance credits that year. The $1,600 limit resets each tax year.

The credit does not roll over to future years if you do not use the full $1,600 in one year. If you install multiple appliances in the same year, the IRS applies credits in this order: heat pumps first, then heat pump water heaters, then electric stoves and cooktops, then heat pump dryers, then dishwashers. Once you hit the $1,600 cap, you stop claiming credits.

If you are married and file jointly, you still have one $1,600 limit for the household, not $1,600 per person. The credit is based on the home address where the appliance is installed, not on who owns the appliance.

Income limits and phase-out rules

The credit begins to phase out if your modified adjusted gross income (MAGI) exceeds certain thresholds. For single filers, the phase-out starts at $200,000. For married couples filing jointly, it starts at $400,000. For married filing separately, it starts at $200,000.

Once your income exceeds the threshold, the credit reduces by $200 for each $1,000 (or fraction thereof) over the limit. For example, if you are single and your MAGI is $210,000, you are $10,000 over the $200,000 threshold. That means your $1,600 credit reduces by $2,000 (10 × $200), which would eliminate the credit entirely. The exact reduction depends on your specific income and filing status.

What you need to claim the credit on your tax return

You will need the model number and serial number of the appliance, the date you installed it, and the purchase price. Keep your receipt and any documentation from the installer showing the installation date. The IRS may ask for proof that the appliance meets the required efficiency standards — most manufacturers include this information on the product label or in the product manual.

You claim the credit on Form 5695, Residential Energy Credits, which you attach to your Form 1040 when you file your tax return. If you use tax software, the software will walk you through the questions and calculate the credit for you. You do not need to send proof to the IRS when you file, but keep your documentation in case you are audited.

If you are unsure whether a specific appliance model meets the efficiency standards, check the ENERGY STAR website or the Department of Energy's list of may have access to models. Some manufacturers also provide a certification letter stating that the appliance qualifies for the tax credit.

Frequently Asked Questions

Can I claim the credit if I bought the appliance in 2023 but installed it in 2024?

Yes. The credit is based on the year you installed the appliance, not the year you bought it. If you purchased a heat pump in 2023 but had it installed in January 2024, you claim the credit on your 2024 tax return. Keep your receipt and installation documentation to prove the installation date.

Do I have to buy an ENERGY STAR appliance, or are there other efficiency standards?

It depends on the appliance. Heat pumps, heat pump water heaters, and heat pump dryers must be ENERGY STAR certified. Electric stoves and dishwashers must also be ENERGY STAR certified. However, some appliances like ground source heat pumps are judged by specific efficiency ratios (SEER2 and HSPF2) rather than ENERGY STAR certification. Check the Department of Energy website for the exact standard for each appliance type.

What if I install two heat pump water heaters in the same year?

You can only claim the credit once per appliance type per home per year. If you install two heat pump water heaters in the same home in 2024, you claim the credit for only one of them. The $1,600 annual limit applies to the total of all appliances in your household, not per appliance.

Does a smart thermostat or smart meter may have access to for the credit?

No. The 2024 energy tax credit covers only specific appliances: heat pumps, heat pump water heaters, electric stoves and cooktops, heat pump dryers, dishwashers, and heat pump pool heaters. Smart thermostats, smart meters, insulation, windows, and other efficiency upgrades do not may have access to under this credit.

Can I claim the credit if my landlord installed the appliance?

No. If your landlord installed the appliance, your landlord claims the credit on their tax return, not you. You can only claim the credit if you purchased and installed the appliance yourself. Renters who install their own may have access to appliances can claim the credit.