Home Energy Savings Act of 2021
Bill: H.R.5187 | Sponsor: Rep. Gomez, Jimmy (D-CA)
Policy area: Taxation

Summary:
Home Energy Savings Act of 2021
This bill extends the nonbusiness energy property tax credit through 2031 and increases the credit percentage from 10% to 30% for qualified energy efficiency improvements. The bill also imposes a $1,200 annual limitation on the credit and limits for windows and doors.
The bill allows a credit for 30% of the cost of home energy audits. A home energy audit is an inspection and written report for a taxpayer's principal residence that identifies the most significant and cost-effective energy efficiency improvements and is conducted and prepared by a certified home energy auditor.
The bill also requires that energy property placed in service after 2023 be produced by a qualified manufacturer and that the taxpayer includes the qualified product identification number for such property on the return of tax.

To amend the Internal Revenue Code of 1986 to extend, increase, and 
             modify the nonbusiness energy property credit.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Energy Savings Act of 2021''.

SEC. 2. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS ENERGY 
              PROPERTY CREDIT.

    (a) Extension of Credit.--Section 25C(g)(2) is amended by striking 
``December 31, 2021'' and inserting ``December 31, 2031''.
    (b) Increase in Credit Percentage for Qualified Energy Efficiency 
Improvements.--Section 25C(a)(1) is amended by striking ``10 percent'' 
and inserting ``30 percent''.
    (c) Application of Annual Limitation in Lieu of Lifetime 
Limitation.--Section 25C(b) is amended to read as follows:
    ``(b) Limitations.--
            ``(1) In general.--The credit allowed under this section 
        with respect to any taxpayer for any taxable year shall not 
        exceed $1,200.
            ``(2) Windows.--The credit allowed under this section by 
        reason of subsection (a)(1) with respect to any taxpayer for 
        any taxable year shall not exceed--
                    ``(A) in the aggregate with respect to all exterior 
                windows and skylights which are not described in 
                subparagraph (B), $200,
                    ``(B) in the aggregate with respect to all exterior 
                windows and skylights which meet the standard for the 
                most efficient certification under applicable Energy 
                Star program requirements, the excess (if any) of $600 
                over the credit so allowed with respect to all windows 
                and skylights taken into account under subparagraph 
                (A).
            ``(3) Doors.--The credit allowed under this section by 
        reason of subsection (a)(1) with respect to any taxpayer for 
        any taxable year shall not exceed--
                    ``(A) $250 in the case of any exterior door, and
                    ``(B) $500 in the aggregate with respect to all 
                exterior doors.''.
    (d) Modifications Related to Qualified Energy Efficiency 
Improvements.--
            (1) Standards for energy efficient building envelope 
        components.--Section 25C(c)(2) is amended by striking ``meets--
        '' and all that follows through the period at the end and 
        inserting the following: ``meets--
                    ``(A) in the case of an exterior window, a 
                skylight, or an exterior door, applicable Energy Star 
                program requirements, and
                    ``(B) in the case of any other component, the 
                prescriptive criteria for such component established by 
                the IECC standard in effect as of the beginning of the 
                calendar year which is 2 years prior to the calendar 
                year in which such component is placed in service.''.
            (2) Roofs not treated as building envelope components.--
        Section 25C(c)(3) is amended by adding ``and'' at the end of 
        subparagraph (B), by striking ``, and'' at the end of 
        subparagraph (C) and inserting a period, and by striking 
        subparagraph (D).
            (3) Air barrier insulation added to definition of building 
        envelope component.--Section 25C(c)(3)(A) is amended by 
        striking ``material or system'' and inserting ``material or 
        system, including air barrier insulation,''.
    (e) Modification of Residential Energy Property Expenditures.--
Section 25C(d) is amended to read as follows:
    ``(d) Residential Energy Property Expenditures.--For purposes of 
this section--
            ``(1) In general.--The term `residential energy property 
        expenditures' means expenditures made by the taxpayer for 
        qualified energy property which is--
                    ``(A) installed on or in connection with a dwelling 
                unit located in the United States and used as a 
                residence by the taxpayer, and
                    ``(B) originally placed in service by the taxpayer.
        Such term includes expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property.
            ``(2) Qualified energy property.--The term `qualified 
        energy property' means any of the following which meet or 
        exceed the highest efficiency tier (not including any advanced 
        tier) established by the Consortium for Energy Efficiency which 
        is in effect as of the beginning of the calendar year in which 
        the property is placed in service:
                    ``(A) An electric heat pump water heater.
                    ``(B) An electric heat pump.
                    ``(C) A central air conditioner.
                    ``(D) A natural gas, propane, or oil water heater.
                    ``(E) A natural gas, propane, or oil furnace or hot 
                water boiler.''.
    (f) Home Energy Audits.--
            (1) In general.--Section 25C(a) is amended by striking 
        ``and'' at the end of paragraph (1), by striking the period at 
        the end of paragraph (2) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(3) 30 percent of the amount paid or incurred by the 
        taxpayer during the taxable year for home energy audits.''.
            (2) Limitation.--Section 25C(b), as amended by subsection 
        (c), is amended adding at the end the following new paragraph:
            ``(5) Home energy audits.--
                    ``(A) Dollar limitation.--The amount of the credit 
                allowed under this section by reason of subsection 
                (a)(3) shall not exceed $150.
                    ``(B) Substantiation requirement.--No credit shall 
                be allowed under this section by reason of subsection 
                (a)(3) unless the taxpayer includes with the taxpayer's 
                return of tax such information or documentation as the 
                Secretary may require.''.
            (3) Home energy audits.--
                    (A) In general.--Section 25C, as amended by 
                subsection (a), is amended by redesignating subsections 
                (e), (f), and (g), as subsections (f), (g), and (h), 
                respectively, and by inserting after subsection (d) the 
                following new subsection:
    ``(e) Home Energy Audits.--For purposes of this section, the term 
`home energy audit' means an inspection and written report with respect 
to a dwelling unit located in the United States and owned or used by 
the taxpayer as the taxpayer's principal residence (within the meaning 
of section 121) which--
            ``(1) identifies the most significant and cost-effective 
        energy efficiency improvements with respect to such dwelling 
        unit, including an estimate of the energy and cost savings with 
        respect to each such improvement, and
            ``(2) is conducted and prepared by a home energy auditor 
        that meets the certification or other requirements specified by 
        the Secretary (after consultation with the Secretary of Energy, 
        and not later than 180 days after the date of the enactment of 
        this subsection) in regulations or other guidance.''.
                    (B) Conforming amendment.--Section 1016(a)(33) is 
                amended by striking ``section 25C(f)'' and inserting 
                ``section 25C(g)''.
            (4) Lack of substantiation treated as mathematical or 
        clerical error.--Section 6213(g)(2) is amended--
                    (A) in subparagraph (P), by striking ``and'' at the 
                end,
                    (B) in subparagraph (Q), by striking the period at 
                the end and inserting ``, and'', and
                    (C) by adding at the end the following:
                    ``(R) an omission of correct information or 
                documentation required under section 25C(b)(5)(B) 
                (relating to home energy audits) to be included on a 
                return.''.
    (g) Identification Number Requirement.--
            (1) In general.--Section 25C, as amended by subsections (a) 
        and (f), is amended by redesignating subsection (h) as 
        subsection (i) and by inserting after subsection (g) the 
        following new subsection:
    ``(h) Product Identification Number Requirement.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) with respect to any item of specified property 
        placed in service after December 31, 2023, unless--
                    ``(A) such item is produced by a qualified 
                manufacturer, and
                    ``(B) the taxpayer includes the qualified product 
                identification number of such item on the return of tax 
                for the taxable year.
            ``(2) Qualified product identification number.--For 
        purposes of this section, the term `qualified product 
        identification number' means, with respect to any item of 
        specified property, the product identification number assigned 
        to such item by the qualified manufacturer pursuant to the 
        methodology referred to in paragraph (3).
            ``(3) Qualified manufacturer.--For purposes of this 
        section, the term `qualified manufacturer' means any 
        manufacturer of specified property which enters into an 
        agreement with the Secretary which provides that such 
        manufacturer will--
                    ``(A) assign a product identification number to 
                each item of specified property produced by such 
                manufacturer utilizing a methodology that will ensure 
                that such number (including any alphanumeric) is unique 
                to each such item (by utilizing numbers or letters 
                which are unique to such manufacturer or by such other 
                method as the Secretary may provide),
                    ``(B) label such item with such number in such 
                manner as the Secretary may provide, and
                    ``(C) make periodic written reports to the 
                Secretary (at such times and in such manner as the 
                Secretary may provide) of the product identification 
                numbers so assigned and including such information as 
                the Secretary may require with respect to the item of 
                specified property to which such number was so 
                assigned.
            ``(4) Specified property.--For purposes of this subsection, 
        the term `specified property' means any qualified energy 
        property and any property described in subparagraph (B) or (C) 
        of subsection (c)(3).''.
            (2) Omission of correct product identification number 
        treated as mathematical or clerical error.--Section 6213(g)(2), 
        as amended by the preceding provisions of this Act, is 
        amended--
                    (A) in subparagraph (Q), by striking ``and'' at the 
                end,
                    (B) in subparagraph (R), by striking the period at 
                the end and inserting ``, and'', and
                    (C) by adding at the end the following:
                    ``(S) an omission of a correct product 
                identification number required under section 25C(h) 
                (relating to credit for nonbusiness energy property) to 
                be included on a return.''.
    (h) Effective Dates.--
            (1) In general.--Except as otherwise provided by this 
        subsection, the amendments made by this section shall apply to 
        property placed in service after December 31, 2021.
            (2) Home energy audits.--The amendments made by subsection 
        (f) shall apply to amounts paid or incurred after December 31, 
        2021.
            (3) Identification number requirement.--The amendments made 
        subsection (g) shall apply to property placed in service after 
        December 31, 2023.
                                 <all>