Federal Energy Tax Credits

The American Recovery and Reinvestment Act of 2009 has made significant changes to energy efficiency tax credits.

Consumers who purchase and install specific products such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment for the home can receive a one-time tax credit of 30% of the cost of improvements, up to $1,500 in total, beginning in January 2009. Some improvements, such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 cap.

Improvements must be installed in or on the taxpayer's principal residence in the United States. You can take these home improvement tax credits for improvements placed in service between January 1, 2009 and December 31, 2010.

Building envelope components (such as wall, ceiling and basement insulation) must meet the 2009 requirements of the International Energy Conservation Code (IECC), a model energy code for buildings.

There are qualifications for each of these credits. We recommend reading more at EnergyStar.gov before claiming home energy efficiency tax credits.

We also recommend consulting a tax expert before purchasing or installing energy efficiency improvements for your home.

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