Insulation deduction

It depends on the kind of insulation. Certain insulation materials and air-sealing products used for attic and wall insulation can qualify for a federal tax credit, specifically the Energy Efficient Home Improvement Credit, of up to $1,200 annually.

You can enter your insulation under "Deductions & Credits", "Home Energy Credits". On the TurboTax screen that says "Energy Efficient Home Improvements" answer "Yes, I made energy efficient improvements or have a carryforward" and "Continue".

The credit applies to 30% of the cost of qualified insulation materials and air-sealing products installed in your primary residence between January 1, 2023, and December 31, 2032.

To qualify for the credit, insulation materials or systems must meet the energy efficiency requirements established by the IECC. 

This includes things like batt, blown-in, rigid board, and spray foam insulation, as well as air-sealing products like caulk, weather stripping, and house wrap (if they come with a Manufacturer's Certification Statement).

You can claim the credit on your tax return using IRS Form 5695. TurboTax will prepare this form for you.

Note that:

• The credit is for existing homes, not new construction or rentals.
• Installation costs are not included in the credit.
• You'll need receipts showing the cost of the insulation materials.
• There are annual aggregate limits for the efficiency tax credit: $3,200 overall total limit for one year; $1,200 for any combination of home envelope improvements, including insulation; and $2,000 for any combination of heat pumps, heat pump water heaters, and biomass stoves/boilers.

Click here for 2024-2025 Energy Tax Credit: Which Home Improvements Qualify?