In a move that could impact homeowners across the nation, the Department of the Treasury and the Internal Revenue Service (IRS) recently announced their intent to propose regulations that implement a product identification number (PIN) requirement for the energy efficient home improvement credit.
This tax credit, which went into effect on January 1, 2023, provides a significant incentive for homeowners making certain qualified expenditures aimed at enhancing their home’s energy efficiency. These can include everything from installing energy-efficient improvements, residential energy property expenditures, to conducting home energy audits during the year.
Under the terms of this credit, homeowners can claim up to 30% of the total amount spent on these qualifying improvements, subject to certain limitations and caps. This benefit applies to qualifying property placed in service between January 1, 2023, and December 31, 2032.
However, starting from January 1, 2025, taxpayers wishing to claim this credit will need to satisfy an additional requirement – they will need to provide a PIN for certain categories of products. The PIN requirement stipulates that an item will only qualify for the energy efficient home improvement credit if it is produced by a qualified manufacturer and the taxpayer includes the qualified PIN of the item on their tax return.
The IRS issued Notice 2024-13 to announce this proposed change and to request public comments on several general and specific questions related to this PIN requirement. The Notice also outlines a potential PIN assignment system that the IRS is considering. Feedback received will assist the IRS in developing the proposed regulations to implement the PIN requirement.
Interested parties are invited to submit written comments by February 27, 2024. The IRS will consider comments received after this date, provided it does not delay the issuance of further guidance.
Homeowners planning to make energy-efficient home improvements should be aware of this upcoming requirement and plan accordingly.
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