Residential Energy Improvement Credit
Residential Energy improvement credits are still available for qualified expenditures.
- The improvements must be placed in service before January 1, 2012.
- They must be for taxpayer’s principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify)
- The 2011 credit rate is 10% of the cost of qualified energy efficiency improvements which include adding insulation, energy-efficient exterior windows and doors and certain roofs. The cost of installing these items does not count.
- The credit can also be claimed for the cost of residential energy property, including labor costs for installation. These items include certain high-efficiency heating and air conditioning systems, water heaters, and stoves that burn biomass fuel.
- The credit has a lifetime limit of $500, of which only $200 may be used for windows. If the total of nonbusiness energy property credits taken in prior years since 2005 is more than $500, the credit may not be claimed in 2011.
- The Residential Energy Efficient Property Credit can be claimed for property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. This credit is 30% of what a homeowner spends, including labor costs for installation and is not subject to a cap (except for fuel cell property) This credit remains in effect through 2016.
- The products must have a Manufacturer Certification Statement to qualify. A Manufacturer’s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
- For recordkeeping , save your receipts and the Manufacturer Certification Statement.
- If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC (Heating, Ventilation, Air Conditioning), or non-solar water heaters.
- Tax credit specifications for qualifying improvements can be found at www.energystar.gov/taxcredits
If you have purchased any of the qualifying improvements listed below, please provide us with the applicable cost::
- Insulation (excluding cost of installation)
- Windows and doors (excluding cost of installation)
- Roofing, metal and asphalt (excluding cost of installation)
- HVAC (Heating, Ventilation, Air Conditioning)
- Water heaters
- Biomass stoves
