Tax Deduction for Home Energy Audits and Energy Efficiency Improvements

Summary

In July 2008 Missouri enacted legislation allowing homeowners to take an income tax deduction of the cost of home energy audits and associated energy efficiency improvements. The tax deduction is valid for expenses incurred on or after January 1, 2009. Any deduction shall be claimed for the tax year in which the qualified home energy audit was conducted or in which the implementation of the recommended energy efficiency improvements occurred.

The deduction claimed cannot exceed $1,000 per year for individual taxpayers or exceed $2,000 per year for taxpayers filing combined returns. A taxpayer may not take a deduction for work that received any type of incentive or rebate through the state or through a utility-sponsored program. After expiring at the end of 2013, the tax deduction was renewed in July 2014 (see S.B. 601). It is currently set to expire on December 31, 2020.

The home energy audit must be performed by a home energy auditor certified by the Missouri Department of Natural Resources before any efficiency improvements are performed in order for the improvements be eligible for the tax deduction. The program website contains a directory of certified auditors, instructions for becoming a certified auditor for the purpose of this incentive, factsheet and guidance documents, and Missouri Department of Revenue Form MO-HEA (used to claim the deduction).