Federal Tax Credits for Home Insulation: What Virginia Homeowners Can Claim

If you've been thinking about upgrading your attic or crawl space insulation but have hesitated over the upfront cost, now is an excellent time to act. The federal government's Energy Efficient Home Improvement Credit — extended and expanded by the Inflation Reduction Act — puts real money back in your pocket for exactly this kind of upgrade.

What Is the Energy Efficient Home Improvement Credit?

Under Section 25C of the Internal Revenue Code, Virginia homeowners who make qualifying energy-efficiency improvements to their primary residence can claim a tax credit of30% of the project cost, up to$1,200per year. This is a credit, not a deduction — meaning it comes directly off your tax bill, dollar for dollar.

Insulation and air sealing materials qualify. If you spend $4,000 on a full attic insulation upgrade, you could receive a$1,200federal tax credit — effectively reducing your net cost to $2,800.

What Qualifies?

To qualify for the 25C credit, the insulation or air sealing material must meet the criteria set by the International Energy Conservation Code (IECC) in effect at the time of installation. In practice, this means insulation that meets or exceeds standard R-value requirements for your climate zone — which our installations exceed on every job.

• Blown-in attic insulation (fiberglass or cellulose) ✓
• Sub-floor crawl space batt insulation ✓
• Air sealing materials and products ✓
• Vapor barriers installed as part of an insulation project ✓

Labor costs for installation do not qualify — only the cost of the materials. Keep your project invoice, which should itemize materials separately.

How to Claim It

To claim the credit, you'll fileIRS Form 5695(Residential Energy Credits) with your federal tax return. The process is straightforward:

1. Save your receipt and invoice from the insulation project.
2. Note the cost of qualifying materials (separate from labor).
3. Complete Form 5695, Part II when filing your taxes.
4. The credit appears on Schedule 3 of your Form 1040.

If you use a tax preparer or software like TurboTax or H&R Block, they will walk you through this automatically if you mention energy-efficiency home improvements.

Dominion Energy Rebates on Top

Virginia homeowners who are Dominion Energy customers may also be eligible forutility rebatesfor upgrading attic insulation to R-49 or higher. These rebates are separate from the federal credit and can be stacked. Check Dominion's current rebate portal or ask us at the time of your estimate — we're familiar with the qualifying requirements and will make sure your project is structured to maximize both.

Get Moving Before the Rules Change

Tax credits are subject to Congressional action and can change. The current 25C credit is in effect through 2032, but the$1,200annual cap means there's no benefit to waiting — you can only capture one year's cap per calendar year. If your project exceeds $4,000 in materials, consider spreading it across two tax years to maximize your credits.

Ready to get started? Call(757) 962-0340for a free estimate. We serve Virginia Beach, Chesapeake, Norfolk, Portsmouth, Hampton, Newport News, Suffolk, and Williamsburg.