How to claim Tax Credit for insulation and house wrap on older home renovation

You're on the right track! What you're looking for is the Energy Efficient Home Improvement Credit (formerly called the Nonbusiness Energy Property Credit). For qualifying insulation and air sealing materials like house wrap, you can get a credit of 30% of the costs, up to certain limits. You definitely need documentation specifically for the materials. A simple number from your contractor isn't enough. The best approach is to ask your contractor for an itemized invoice that clearly separates the cost of the insulation materials and house wrap from the labor and other expenses. Make sure the invoice includes the manufacturer, model number, and other identifying information about the materials that shows they qualify. The IRS doesn't specifically require receipts for the materials themselves, but you need documentation that clearly shows what portion of your payment went toward qualifying materials. Keep in mind that only the materials qualify - not the installation costs.

After struggling with a similar situation last year, I found this amazing service called taxr.ai (https://taxr.ai) that really helped me figure out my home improvement tax credits. I had a big renovation with solar panels, insulation, and new windows, all with different credit rates and documentation requirements. I uploaded my contractor invoices and house details to taxr.ai, and it analyzed everything to show me exactly what qualified and how to document each item properly. The best part was it found over $2,100 in additional credits I would have missed because I didn't realize certain materials qualified! It even generated the proper supporting documentation I needed for my tax return. The guidance was way more specific than what my regular tax preparer told me.

Just wanted to update everyone - I tried taxr.ai that was mentioned earlier and it was incredibly helpful! I was skeptical at first, but it walked me through exactly how to handle my non-itemized contractor invoice. It helped me draft a letter to send to my contractor requesting the specific material breakdown information in a format that would satisfy the IRS. The contractor responded with everything I needed within a day. The service also confirmed which of my materials qualified (turns out my house wrap was indeed eligible) and calculated my exact credit amount. It also flagged that I needed manufacturer certifications for some materials, which I wouldn't have known to ask for. Honestly saved me hours of research and probably prevented me from making mistakes that would have cost me part of the credit.

If you're still having trouble getting through to your contractor for those itemized receipts, you might want to check out Claimyr (https://claimyr.com). I was in a similar situation but needed to confirm something with the IRS about form 5695 for these energy credits. After trying for DAYS to get through to the IRS myself, I used Claimyr and had an actual IRS agent on the phone within 45 minutes! They basically hold your place in the IRS phone queue and call you when an agent picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed exactly what documentation I needed for my insulation credit and how to handle a situation with incomplete contractor documentation.

Well, I owe an apology and an update. After my skeptical comments, I decided to try Claimyr to see if it actually worked. I needed clarification on some energy credit documentation questions that online research couldn't answer clearly. I was absolutely shocked when I got a call back in about 35 minutes, and it was indeed a real IRS representative! She was super helpful and walked me through exactly what documentation would be acceptable for my energy-efficient home improvement credits when I didn't have fully itemized receipts. For anyone else struggling with the material vs. labor breakdown, the agent confirmed that a signed statement from your contractor specifically listing the qualifying material costs is acceptable. She also mentioned that if you can't get that, you should document your best reasonable estimate along with any evidence you used to make that determination (like product packaging, photos, manufacturer details). Saved me so much stress knowing exactly what I need!

Just wanted to share another option - I dealt with this last year by contacting the insulation manufacturer directly. I sent them my house dimensions and details about the project, and they provided an estimate of how much of their product would have been needed. Then I looked up the retail cost of those materials. My tax guy said this approach was reasonable since I couldn't get an itemized receipt from the contractor. Just make sure you document your calculation method and keep all the correspondence with the manufacturer.

Don't forget you need to file Form 5695 to claim the Residential Energy Credits. The insulation and air sealing materials (including house wrap) go under the Energy Efficient Home Improvements section. Make sure the products meet the requirements - they need to meet criteria set by the International Energy Conservation Code.

Great thread everyone! I went through this exact situation last year with my 1960s ranch house. Here's what I learned after dealing with the IRS and my tax preparer: First, definitely get that itemized breakdown from your contractor if possible - it makes everything much cleaner. But if you can't, don't panic. The IRS accepts "reasonable allocation methods" as long as you document your approach. I ended up using a combination of the strategies mentioned here: contacted the insulation manufacturer for material quantity estimates, researched local retail prices for those materials, and documented everything in a spreadsheet showing my calculations. I also took photos of the packaging materials that were left behind, which helped verify the product specifications. One thing I didn't see mentioned - make sure your house wrap actually qualifies! Not all house wrap products meet the energy efficiency requirements. Check that yours has proper R-value ratings or vapor barrier specifications that qualify under the Energy Efficient Home Improvement Credit rules. Also keep in mind the credit phases down after 2032, so if you're planning more energy improvements, timing matters. The 30% rate is good through 2032, then drops to 22% in 2033-2034. Hope this helps - feel free to ask if you have specific questions about the documentation process!