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Federal Tax Credit Information /
Energy Department - Home Efficiency -
The Energy Policy Act of 2005 includes tax credits for consumers who perform energy efficient upgrades to their home. A tax credit can provide you with significant savings by reducing the amount of income tax you pay at the end of the year. Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces the tax itself. Tax credits are available for many types of energy efficient home improvements including adding insulation, replacement windows, and certain high efficiency heating and cooling equipment. The maximum amount of homeowner credit for all improvements combined is $500 during the two year period of the tax credit. This tax credit applies to improvements made to your primary residence from January 1, 2006 through December 31, 2007. For more information, please review: IRS Notice 2006-26. If you are building a new home, you do not qualify for the tax credits for "eligible building envelope components" (windows, doors, insulation, roofs) or "qualified energy property" (HVAC & non-solar water heaters). However, the tax credit for PV and solar water heating is available for homeowners building new homes. Below is a summary of tax credits for homeowners. To apply, please use IRS Form 5695. SUMMARY OF TAX CREDITS FOR HOMEOWNERS | Product Category | Product Type | Tax Credit Specification | Tax Credit | Notes | | Windows & Doors | Exterior Windows and Skylights | ENERGY STAR qualified OR meets IECC1 | 10% of cost, up to $200 for all windows, skylights and storm windows | -All ENERGY STAR labeled windows and skylights qualify for tax credit. -Installation costs are not included. -For tax purposes, save your receipt and either the ENERGY STAR label from all your new windows OR the Manufacturer's Certification Statement. | | Storm Windows | Meets IECC1 in combination with the exterior window over which it is installed, for the applicable climate zone | 10% of cost, up to $200 for all windows, skylights and storm windows | -Manufacturer Certification Statement will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.) that a product may be combined with to be eligible in specific climate zones.-Installation costs are not included. -Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Exterior Doors | Meets IECC1 | 10% of cost, up to $500 | -ENERGY STAR doors will almost always qualify, except for certain parts of California. -Installation costs are not included. -Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Storm Doors | In combination with a wood door assigned a default U-factor by the IECC1, and does not exceed the default U-factor requirement assigned to such combination by the IECC | 10% of cost, up to $500 | -Eligibility will be confirmed by manufacturer and documented in the Manufacturer Certification Statement.-Installation costs are not included. -Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Roofing | Metal Roofs | ENERGY STAR qualified | 10% of cost, up to $500 | -All ENERGY STAR labeled metal roofs qualify for the tax credit.-Must be expected to last 5 years OR have a 2 year warranty. -Installation costs are not included. -Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Insulation | Insulation | Meets 2000 IECC & Amendments | 10% of cost, up to $500 | -For insulation to qualify, its primary purpose must be to insulate.-Must be expected to last 5 years OR have a 2 year warranty. -Installation costs are not included. -Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | HVAC | Central A/C | Split Systems:
EER >=12.5
SEER >= 15
Package systems:
EER >= 12
SEER >= 14 | $300 | -Not all ENERGY STAR products will qualify for the tax credit.-ENERGY STAR specification:
Split Systems: EER >= 11.5 & SEER >= 14 Package systems: EER >= 11 & SEER >= 14-Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Air Source Heat Pumps | HSPF >= 9
EER >= 13
SEER >= 15 | $300 | -Not all ENERGY STAR products will qualify for the tax credit.-ENERGY STAR specification:
Split systems: HSPF >= 8.2 & EER >= 11.5 & SEER >= 14
Package systems: HSPF >= 8 & EER >= 11 & SEER >= 14 -Manufacturer’s Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Electric Heat Pump Water Heater | Energy Factor >= 2.0 | $300 | -This is more than twice as efficient as the current federal standard.-Manufacturer's Certification Statement required. -For tax purposes, save your receipt and the Manufacturer's Certification Statement. | | Photovoltaic Systems | Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. | 30% of cost, up to $2,000 | | | | | | |
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