Preliminary Data on the IRA Energy Efficient Home Improvement Credit

INSIGHTi

Preliminary Data on the IRA Energy Efficient

Home Improvement Credit

Updated April 13, 2026

In August 2024, the Internal Revenue Service (IRS) released preliminary 2023 data on the residential

clean energy credit (RCEC) and the energy efficient home improvement credit (EEHIC). The credits were

scheduled to expire at the end of 2023 and 2021, respectively, before being reinstated and expanded by

P.L. 117-169 (commonly known as the Inflation Reduction Act of 2022, or IRA). These credits were more

recently repealed by P.L. 119-21, the FY2025 reconciliation law (commonly known as the One Big

Beautiful Bill Act), with the enacting language appearing to repeal the EEHIC for property placed in

service after December 31, 2025.

This publication focuses on the EEHIC, describing its fiscal cost, its uptake among high-income

taxpayers, the geographic distribution of credit recipients, and the types of energy efficiency upgrades

most commonly claimed by credit recipients. A companion Insight, CRS Insight IN12423, Preliminary

Data on the IRA Residential Clean Energy Credit, provides similar analysis of the RCEC.

The Energy Efficient Home Improvement Credit

(EEHIC)

Between tax years 2023 and 2025, taxpayers could receive an EEHIC for making energy efficiency

upgrades to their homes. As described in 26 U.S.C. §25C, such upgrades must have conformed to

standards set by Energy Star, the Consortium for Energy Efficiency, or the International Energy

Conservation Code, depending on the specific upgrade being made. Purchases of energy efficient

appliances installed at homes that were rented, owned and used as secondary residences, or owned and

used as principal residences were eligible for the EEHIC. Upgrades to the insulation, exterior doors, and

exterior windows or skylights of homes owned and used as principal residences were also EEHICeligible. In addition, home energy audits of taxpayers’ principal residences (whether owned or rented)

were eligible for the credit.

The EEHIC was equal to 30% of the costs of purchasing and installing eligible energy efficient

equipment. The credit was generally limited to $1,200 per taxpayer and $600 per item, with the following

exceptions:

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the credit for installing energy efficient exterior windows and skylights could not exceed

$600, even if taxpayers installed more than one exterior window or skylight;

the credit for installing energy efficient exterior doors could not exceed $250 per door or

$500 for all exterior doors;

the credit for home energy audits was capped at $150; and

taxpayers could claim a credit of up to $2,000 for installations of electric or natural gas

heat pumps, electric or natural gas heat pump water heaters, biomass stoves, and biomass

boilers. This $2,000 amount was in addition to the normal $1,200 maximum, allowing

some taxpayers to receive as much as $3,200 per year from the EEHIC.

The EEHIC was subject to annual limits but no lifetime limits, so taxpayers spacing their upgrades over

multiple years could benefit more than taxpayers making all their upgrades in a single year.

The EEHIC was nonrefundable, meaning that if the value of the credit exceeded a taxpayer’s income tax

liability, they could not receive a refund for the difference. Unlike with the RCEC, unused EEHIC credits

could not and cannot be “carried forward” to reduce future tax liabilities. These features limited the value

of the EEHIC for households with low tax liabilities, including most low-income households.

EEHIC Data

An estimate from December 2023 projected that the cost of the EEHIC would be $4.0 billion in FY2023

before dropping to between $2.0 billion and $2.1 billion annually from FY2024 to FY2027. The

preliminary IRS data indicate that the EEHIC cost $2.1 billion in tax year 2023.

The EEHIC disproportionately benefited higher-income households in 2023. Nearly three-fifths (58%) of

tax filers receiving the EEHIC had incomes of $100,000 or more, as compared with 24% of all tax filers.

Because these high-income taxpayers also received larger-than-average credits, they received more than

62% of all EEHIC benefits in 2023. By contrast, taxpayers in the bottom 27% of the income distribution

received 0.8% of EEHIC benefits (rounded to 1% in the table below).

Table 1. Energy Efficient Home Improvement Credits (EEHICs), by Taxpayer Income, 2023

Share of EEHIC beneficiaries, average EEHIC benefits, and share of total EEHIC benefits, by taxpayer income group

Share of All Tax

Returns

Share of EEHIC

Beneficiaries

Average EEHIC

per Beneficiary

Share of EEHIC

Benefits Received

Incomes below $25,000

27%

2%

$393

1%

Incomes $25,000 to $49,999

23%

10%

$711

8%

Incomes $50,000 to $99,999

26%

30%

$842

29%

Incomes of $100,000 or more

24%

58%

$947

62%

Incomes of $500,000 or more

1%

3%

$1,121

3%

Source: CRS calculations based on preliminary 2023 income tax data from the Internal Revenue Service, available at

https://www.irs.gov/statistics/soi-tax-stats-clean-energy-tax-credit-statistics. As of April 8, 2026, final 2023 income tax data

have not yet been released.

Notes: Table includes early and on-time income tax filers. Late filers are not included. Taxpayers with incomes of

$500,000 or more are a subset of the group “Incomes of $100,000 or more”—and are included there as well. Shares are

rounded to the nearest percentage point.

As shown in Table 2, taxpayers in the Northeast were the most likely to claim the EEHIC, while

taxpayers in Southern states and Hawaii were the least likely to claim the credit. Roughly 3% of tax filers

in Maine claimed the EEHIC, about six times the rate of EEHIC uptake in Hawaii.

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Table 2. States with the Highest and Lowest Shares of Taxpayers Benefiting

from the EEHIC, 2023

Share of taxpayers benefiting from the EEHIC, by state, 2023

States with the highest shares of taxpayers benefiting from the EEHIC:

Maine

3.0%

New Hampshire

2.8%

Vermont

2.8%

Connecticut

2.6%

Massachusetts

2.6%

States with the lowest shares of taxpayers benefiting from the EEHIC:

West Virginia

1.1%

Arkansas

1.1%

Louisiana

1.0%

Oklahoma

0.9%

Hawaii

0.5%

Source: CRS calculations based on preliminary 2023 income tax data from the Internal Revenue Service, available at

https://www.irs.gov/statistics/soi-tax-stats-clean-energy-tax-credit-statistics. As of April 8, 2026, final 2023 income tax data

have not yet been released.

Notes: Table includes early and on-time income tax filers. Late filers are not included. Percentages are rounded to the

nearest tenth of a percentage point.

The average credit per EEHIC recipient was broadly similar across states, with average amounts ranging

from a low of $743 in Iowa to a high of $1,192 in Washington. Nationally, the average credit per EEHIC

recipient was $882.

Before counting late filers, more than 2.3 million taxpayers received the EEHIC in 2023. The services and

appliances most commonly claimed by EEHIC recipients were insulation upgrades (claimed by 30% of

EEHIC recipients), exterior windows and skylights (30%), central air conditioners (21%), and taxpayers’

“most expensive door” (17%). Taxpayers were least likely to claim the EEHIC for biomass stoves or

boilers (2.1%) and home energy audits (1.6%). EEHIC recipients could claim the credit for more than one

energy efficiency upgrade.

Residential Energy Tax Credits: Combined Data

According to the IRS’s preliminary data release, at least 3.4 million taxpayers used the EEHIC, the

RCEC, or both to reduce their income tax liabilities in 2023. Approximately 2.2 million taxpayers

claimed only the EEHIC, while 163,000 taxpayers claimed both the EEHIC and the RCEC. Although dual

receipt was rare for all types of taxpayers, it was most common among high-income households. In 2023,

1 in 257 tax filers earning $500,000 or more received both IRA residential energy credits, as compared

with 1 in 33,769 tax filers earning less than $25,000.

Initial EEHIC and RCEC costs roughly offset each other relative to projections: the EEHIC cost less than

expected, while the RCEC cost more. The credits’ combined 2023 fiscal cost has thus far come out to $8.4

billion, not counting late filers, tracking relatively closely to the Joint Committee on Taxation’s projected

cost of $7.6 billion for FY2023. Both the number of recipients and the fiscal cost of the credits are likely

to increase once late filings are included in the data.

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EEHIC claims are disproportionately high among taxpayers in the Northeast, and the RCEC is

disproportionately claimed by taxpayers in the South and West. The income distributions for the credit

claims, however, are similar. According to the preliminary IRS data, 0.3% of RCEC benefits, 0.8% of

EEHIC benefits, and 0.4% of the two credits’ combined benefits went to taxpayers in the bottom 27% of

the taxpayer income distribution in 2023. Taxpayers in the top 24% of the income distribution received

two-thirds (66%) of the credits’ combined benefits.

Author Information

Nicholas E. Buffie

Analyst in Public Finance

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff

to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of

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