The Inflation Reduction Act of 2022 reinstated the 25C tax credit for insulation and air sealing through 2022. Until Dec. 31, homeowners may be eligible for a federal tax credit up to $500 or 10% of their purchase of insulation to their main home, whichever is lower.

The legislation also increases the 25C tax credit and makes it valid from Jan. 1, 2023 through Dec. 31, 2032. Taxpaying homeowners can receive a federal tax credit up to 30% of their purchase, up to $1,200. A tax credit reduces tax owed, dollar for dollar.