Income Tax - Energy Efficient Home Improvement Credit
HB0087 creates a new Maryland personal income tax credit for certain energy-efficient home improvements made to an individual’s residence. The credit would equal up to 30% of qualifying costs paid or incurred during the taxable year, capped at $3,200 total per year, with separate sublimits for specific items such as home energy audits, exterior windows, skylights, doors, and certain residential energy property expenditures. The bill defines qualifying improvements by reference to federal Internal Revenue Code section 25C and includes items such as heat pumps, heat pump water heaters, and biomass stoves or boilers.
The bill also sets eligibility and allocation rules for shared housing situations and ownership structures. It allows proportional treatment for tenant-stockholders in cooperative housing corporations and members of condominium associations, addresses jointly occupied residences, limits the credit to nonbusiness-use portions when an improvement is used partly for business, and bars the credit if the improvement was purchased with subsidized energy financing. Taxpayers would need to provide documentation required by the Comptroller, and the credit would apply to taxable years beginning after December 31, 2025, with an effective date of July 1, 2026.
If enacted, HB0087 would add a new section to Maryland’s Tax-General Article authorizing a state income tax credit for residential energy efficiency upgrades. It would reduce state income tax liability for eligible individuals who install qualifying improvements, while also creating administrative responsibilities for the Comptroller to verify claims and enforce documentation requirements. The bill would affect homeowners, tenants in cooperative housing, condominium owners, and others making eligible improvements to their residences, and it would interact with federal definitions and standards for energy-efficient home improvements.
The available record shows the bill was introduced and assigned to the House Ways and Means Committee, with a hearing scheduled, but there are no recorded committee transcripts or votes in the provided materials. As a result, there is no documented floor or committee sentiment to assess from debate or roll call. Based on the bill’s structure, it appears to be a policy proposal aimed at encouraging energy efficiency through tax incentives, but the provided record does not show formal support or opposition.
No specific points of contention are documented in the provided materials because there are no committee discussion transcripts or votes. Potential areas that could prompt scrutiny, based on the bill text alone, include the fiscal cost of the credit to the State, the complexity of verifying eligible expenditures, the interaction with federal energy tax rules, and whether the caps and exclusions are sufficient to target the incentive. The bill’s restrictions on subsidized financing and its allocation rules for shared ownership properties may also be areas where stakeholders could seek clarification.