New Tax Credit for Homeowners: Get Money Back for Installing U.S.-Grown Hardwood Flooring and Cabinets

The “Solid American Hardwood Tax Credit Act” is looking to sweeten the deal for homeowners making certain upgrades, specifically by adding a new category of eligible expenses to the existing energy-efficient home improvement tax credit (Section 25C of the tax code). In plain English, if you’re planning a remodel, this bill could give you a tax break for choosing domestic wood products. The core change is the introduction of a credit for “natural carbon sink expenditures,” which covers materials like flooring, paneling, millwork, cabinets, windows, or skylights, provided they are made from deciduous trees (the kind that shed leaves, like oak or maple) that were grown and processed entirely within the United States. This credit applies only to your main residence, and you must be the first user of the material, with the expectation that it will stay put for at least five years.

The All-American Remodel Discount

This isn’t just about making your home look nice; it’s about incentivizing specific sourcing. The bill is trying to drive demand directly to the U.S. forestry and processing industries. Imagine you’re a homeowner planning to replace your kitchen floor. Under this bill (SEC. 2), if you choose U.S.-grown and U.S.-processed oak flooring, that material cost could qualify for the credit, potentially lowering your tax bill. This is a deliberate push to use tax policy to support domestic manufacturing jobs, creating a direct financial benefit for homeowners who choose American-made hardwood products over imported alternatives or non-wood materials.

The Fine Print on Sourcing and Longevity

There are two key details that could trip people up. First, the material must be made from deciduous trees that were “grown and processed right here in the United States.” While the “grown” part is clear, the term “processed” is a little vague (LevelOfVagueness.MEDIUM). Does that mean the raw log was sawed here, or that every single step, including finishing and assembly, must happen stateside? This lack of strict definition could lead to disputes down the line, especially for complex items like pre-finished cabinet doors. Second, you must “reasonably expect” to keep the material for at least five years. If you claim the credit and then sell your house 18 months later, that might raise questions, though enforcing this subjective expectation is going to be tricky.

Extending the Existing Deadline

Beyond the new wood credit, the bill offers a nice bonus for anyone planning energy efficiency upgrades. It extends the expiration date for the entire Section 25C tax credit—which covers things like insulation, energy-efficient windows, and high-efficiency furnaces—from the end of 2032 to the end of 2035 (SEC. 2). This means homeowners have three extra years to take advantage of these established tax breaks, providing longer-term certainty for those budgeting for future home improvements. Overall, this legislation is a clear win for domestic hardwood producers and homeowners prioritizing U.S.-made materials, offering a tangible tax incentive to align their remodeling choices with domestic economic goals.