Tax Credits/Rebates
For Energy Efficiency
On December 17, 2010, President Obama announced an extension of the Federal Energy Efficiency Tax Credit into 2011; however, many efficiency requirements and credit amounts have changed including:
The tax credit has been amended from 30 percent of the installed cost up to $1,500 to 10 percent of the installed cost up to $500 or a specific amount from $50 - $300.
You cannot claim this credit if you have already received more than $500 in credits from 2005 to 2010.
How do I apply for the tax credit? What tax form do I need for the energy efficiency tax credits?
For products 'placed in service' in 2011, you need to file the 2011 IRS Form 5695 and submit
it with your 2011 taxes (by April 15, 2012).
On the 1040 form, the residential energy tax credit amount (from Form 5695) is claimed on line 52.
Save your receipts and the Manufacturer’s Certification Statement for your records. Submit Form 5695 with your taxes.
What is included in the tax credit?
Air Source Heat Pumps – Heat pumps offer an energy-efficient alternative to furnaces and air conditioners in moderate climates. Like your refrigerator, heat pumps use electricity to move heat from a cool space into a warm space, making the cool space cooler and the warm space warmer. During the heating season, heat pumps move heat from the cool outdoors into your warm house; during the cooling season, heat pumps move heat from your cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide up to four times the amount of energy they consume.
Tax Credit Amount: $300
Requirements - Split Systems: HSPF ≥ 8.5 | EER ≥ 12.5 | Seer ≥ 15
Requirements - Package Systems: HSPF ≥ 8 | EER ≥ 12 | SEER ≥ 14
Central Air Conditioning (CAC) – The best way to find tax credit eligible CACs is to ask your Heating, Ventilation and Air Conditioning Contractor. To verify tax credit eligibility, consult your HVAC contractor to provide the Manufacturer’s Certification Statement for the equipment you plan to purchase. Or, search the manufacturer’s website.
Tax Credit Amount: $300
Requirements - Split Systems: SEER ≥ 16 | EER ≥ 13
Requirements - Package Systems: SEER ≥ 14 | EER ≥ 12
Insulation – Adding adequate insulation is one of the most cost-effective home improvements.
Tax Credit Amount: 10 percent of the cost, up to $500
Requirements - Typical bulk insulation products, such as batts, rolls, blow-in fibers, rigid boards, expanding spray and pour-in-place, can qualify. Products that reduce air leaks can also qualify, as long as they come with a Manufacturer’s Certification Statement. Examples include weather stripping, spray foam in a can, caulk designed to air seal and house wrap. The tax credit does not include installation costs, but you can install the insulation/home sealant yourself and get the credit.
Roofs (Metal and Asphalt) – Qualified roof products reflect more of the sun’s rays, which can lower roof surface temperature by up to 100ºF, decreasing the amount of heat transferred into your home.
Tax Credit Amount: 10 percent of the cost, up to $500
Requirements - "Metal roofs with appropriate pigmented coatings" and "asphalt roofs with appropriate cooling
granules" that also meet ENERGY STAR® requirements qualify. The tax credit does not include installation costs.
Electric Heat Pump Water Heater – Water heating can account for 14 to 25 percent of the energy consumed in your home.
Tax Credit Amount: $300
Requirements - Energy Factor ≥ 2.0
Windows, Doors, Skylights – Energy efficient windows, doors and skylights can reduce energy bills.
Tax Credit Amount: 10 percent of the cost, up to $500, windows are capped at $200
Requirements - Tax credit does not include installation costs.
Geothermal Heat Pumps – Geothermal heat pumps are similar to ordinary heat pumps, but use the ground instead of outside air to provide heating, air conditioning and, in most cases, hot water. Because they use the earth’s natural heat, they are among the most efficient and comfortable heating and cooling technologies currently available.
Tax Credit Amount: 30 percent of cost with no upper limit including installation costs
Expires: December 31, 2016
Details: Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.
Requirements - Open Loop:: EER ≥ 16.2 | COP ≥ 3.6
Requirements - Direct Expansion:: EER ≥ 5 | COP ≥ 3.5
Solar Water Heaters – Solar water heaters come in a variety of designs, all including a collector and storage tank, and all using the sun’s thermal energy to heat water. Solar water heaters are typically described according to the type of collector and the circulation system.
Tax Credit Amount: 30 percent of cost with no upper limit including installation costs
Expires: December 31, 2016
Details: Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.
Requirements - At least half of the energy generated by the "qualifying property" must come from the sun. The system must be certified by the Solar Rating and Certification Corporation or a comparable entity endorsed by the government of the state in which the property is installed.
Note: The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling.
Photovoltaic systems must provide electricity for the residence and must meet applicable fire and electrical code requirements.
Please note, not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy-efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time without a tax credit.
