How To Receive the Energy Efficient Home Improvement Credit
If you are planning to upgrade your primary residence in 2025 with energy efficient replacement products, it is important to know how to qualify for the Energy Efficient Home Improvement Credit (EEHIC).
PINS, QM Codes and Qualified Manufacturer
There are specific numbers and codes a homeowner should make certain they receive at the time or purchase or installation if planning to qualify for the Energy Efficient Home Improvement Credit (EEHIC). For energy efficient home improvements in 2025, you will need to include the PIN or QM Code of the products you purchased with your tax return. In addition, it is also important to verify that the specified property you are installing meets the necessary energy efficiency requirements, which can be found on the Energy Star website.
Qualified Product Identification Number (PIN)
A qualified product identification number (PIN) is 17 characters assigned by a qualified manufacturer (QM) to each item of specified property produced by the QM that requires a PIN. For any item of specified property placed in service on or after Jan. 1, 2025, taxpayers must include the PIN of such item on their tax returns.
For example: if a taxpayer places in service four eligible external windows, the taxpayer must include the corresponding four PINs on the taxpayer’s tax return for the windows for which the taxpayer claims the credit.
Qualified Manufacturer Code (QM Code)
The QM code is a unique 4-character code assigned to a QM by the IRS. The QM Code may only be used for 2025 as the IRS has specified that only 17-character PINs will be accepted after January 1, 2026.
What is a qualified manufacturer (QM)?
A qualified manufacturer (QM) under 25C(h)(3) is a manufacturer of qualified property that enters into an agreement with the IRS. Be certain to ask the company you are working with to improve your home if they are a qualified manufacturer and if they have a QMID (qualified manufacturer identification number).
In order for a business to be designated as a qualified manufacturer, they must register through the IRS Energy Credits Online (ECO) portal. The business is not a qualified manufacturer until it receives an acknowledgement from the IRS.
What type of energy efficient item qualifies for the EEHIC?
Qualified energy property must be registered in order for homeowners to qualify for the EEHIC. The IRS provides the following list of the type of products but keep in mind the products must also be Energy Star certified:
- Exterior doors, windows, skylights and insulation materials
- Central air conditioners, water heaters, furnaces, boilers and heat pumps
- Biomass stoves and boilers
- Home energy audits
For a complete list of energy efficient products, visit the Energy Star website.
For more information on the Energy Efficient Home Improvement Credit, please visit the Frequently Asked Questions page on the IRS website.
As always, should you have questions on this or other matters affecting you or your business, please call 215.675.8364 or email us to speak with a CPA today.
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