(a) In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36 the following new section:

36A. Residential energy expenditures credit

(a) Allowance of credit

In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle for an applicable taxable year an amount equal to the residential energy expenditures of the taxpayer for such taxable year.

(b) Limitation

The credit allowed under this section with respect to any taxpayer for any taxable year shall not exceed $1,200 ($2,400 in the case of a joint return or a head of household (as defined in section 2(b))).

(c) Applicable taxable year

For purposes of this section—

(1) In general

The term applicable taxable year means any taxable year if—

(A)

the average of the PCE for the 12-month period ending on December 31 of such taxable year, exceeds

(B)

102 percent of the average of the PCE for the 12-month period immediately preceding the period described in subparagraph (A).

(2) PCE

The term PCE means the implicit price deflator for personal consumption expenditures (as published by the Bureau of Economic Analysis of the Department of Commerce).

(d) Residential energy expenditures

The term residential energy expenditures means expenditures—

(1)

made by the taxpayer for electricity, natural gas, or propane, and

(2)

used on, or in connection with, a dwelling unit—

(A)

located in the United States,

(B)

owned or rented by the taxpayer, and

(C)

used by the taxpayer as the taxpayer’s principal residence (within the meaning of section 121).

(e) Phaseout based on modified adjusted gross income

(1) In general

The amount of the credit otherwise allowed under this section shall be reduced by the amount which bears the same ratio to such amount (determined without regard to this subsection) as—

(A)

the excess (if any) of—

(i)

the taxpayer’s modified adjusted gross income, over

(ii)

$75,000 ($150,000 in the case of a joint return or a head of household (as defined in section 2(b))), bears to

(B)

$25,000 ($50,000 in the case of a joint return or a head of household (as defined in section 2(b))).

(2) Modified adjusted gross income

For purposes of paragraph (1), the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.

(f) Coordination of credit with certain programs

(1) Energy assistance programs

An amount shall not fail to be treated as a residential energy expenditure of the taxpayer merely because such expenditure is reimbursed to, or paid on behalf of, such taxpayer under any Federal, State, local, or Tribal energy assistance program.

(2) Means-tested programs

For purposes of any Federal means-tested program, any refund made to an individual (or the spouse of an individual) by reason of this section shall not be treated as income (and shall not be taken into account in determining resources for the month of its receipt and the following month).

(g) Regulations

The Secretary, in coordination with the Commissioner of the Bureau of Labor Statistics, shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.

(b) Clerical amendments

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2025.