Federal Tax Credits for Energy Efficiency

By
Real Estate Agent with RE/MAX Real Estate Limited

This information is reprinted directly from the Energy Star website.

Federal Tax Credit for energy efficiency items such as windows & doors, etc:

UPDATED September 14, 2009

Quick link to this page: energystar.gov/taxcredits

Federal Tax Credits for Energy Efficiency includes:

Not looking for Consumer information?

**Please note, not all ENERGY STAR qualified homes and products qualify for a tax credit. These tax credits are available for a number of products at the highest efficiency levels, which typically cost much more than standard products. If, for whatever reason, you decide not to purchase a product covered by the tax credit, you may still consider purchasing an ENERGY STAR product. 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.

Tax Credits for Consumers:

Home Improvements

Tax credits are now available for home improvements:

  • must be "placed in service" from January 1, 2009 through December 31, 2010
  • 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 qualify)
  • $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
  • must have a Manufacturer Certification Statement to qualify
  • for record keeping, save your receipts and the Manufacturer Certification Statement
  • improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) - use IRS Tax Form 5695 (2009 version) - it will be available late 2009 or early 2010
  • 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, or non-solar water heaters. More.
SUMMARY OF TAX CREDITS FOR HOMEOWNERS Product CategoryProduct TypeTax Credit SpecificationTax CreditNotes InsulationWindows & DoorsRoofingHVACWater HeatersBiomass StoveGeo-Thermal Heat PumpSolar Energy SystemsSmall Wind Energy SystemsFuel CellsCars
Insulation Meets 2009 IECC & Amendments 30% of cost, up to $1,5001

FAQ on Insulation.

Check to see if you have Home Performance with ENERGY STAR in your areas. Adding insulation to your home is covered.

Windows, Doors, and Skylights Before June 1, 2009:
Must meet ENERGY STAR criteria

After June 1, 2009:
U factor <= 0.30

SHGC <= 0.30
30% of cost, up to $1,5001

Not all ENERGY STAR labeled windows, doors, and skylights qualify for tax credit.

More information

Storm Windows & Storm Doors In combination with the exterior window over which it is installed:
  1. has a U-factor and SHGC of 0.30 or below
  2. Meets the IECC
30% of cost, up to $1,5001

FAQ on Storm Doors and Storm Windows.

Metal Roofs,
Asphalt Roofs
All ENERGY STAR qualified metal and reflective asphalt shingles 30% of cost, up to $1,5001

FAQ on Roofs.

Central A/C Split Systems:
SEER >= 16, EER >=13

Package systems:
SEER >= 14, EER >= 12
30% of cost, up to $1,5001

FAQ on Central ACs.

FAQ on Air Source Heat Pumps.

Note - not all ENERGY STAR products will qualify for the tax credit.

Air Source Heat Pumps Split Systems:
HSPF >= 8.5, EER >= 12.5, SEER >= 15

Package systems:
HSPF >= 8, EER >= 12, SEER >= 14
30% of cost, up to $1,5001
Natural Gas or Propane Furnace

AFUE >= 95

30% of cost, up to $1,5001

FAQ on Furnaces and Boilers.

Note - not all ENERGY STAR products will qualify for the tax credit.

Oil Furnace

AFUE >= 90

30% of cost, up to $1,5001
Gas, Propane, or Oil Hot Water Boiler

AFUE >= 90

30% of cost, up to $1,5001
Advanced Main Air Circulating Fan No more than 2% of furnace total energy use. 30% of cost, up to $1,5001

FAQ: What if the fan qualifies, but the furnace does not?

Gas, Oil, Propane Water Heater Energy Factor >= 0.82
or a thermal efficiency of at least 90%.
30% of cost, up to $1,5001

FAQ on Water Heaters.

Electric Heat Pump Water Heater Same criteria as ENERGY STAR: Energy Factor >= 2.0 30% of cost, up to $1,5001
Biomass Stove

Stove which burns biomass fuel to heat a home or heat water.

Thermal efficiency rating of at least 75% as measured using a lower heating value.

30% of cost, up to $1,5001 FAQ on Biomass Stoves.
Geo-Thermal Heat Pump

Same criteria as ENERGY STAR:

Closed Loop:
EER >= 14.1, COP >= 3.3

Open Loop:
EER >= 16.2, COP >= 3.6

Direct Expansion:
EER >= 15, COP >= 3.5

30% of the cost

All ENERGY STAR geo-thermal heat pumps qualify for the tax credit.

What about water-to-water geothermal heat pumps?

Must be "placed into service" before December 31, 2016.

Solar Water Heating

At least half of the energy generated by the "qualifying property" must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.

The credit is not available for expenses for swimming pools or hot tubs.

The water must be used in the dwelling.

The system must be certified by the Solar Rating and Certification Corporation (SRCC).

30% of cost

All ENERGY STAR solar water heaters qualify for the tax credit.

Must be placed in service before December 31, 2016.

Photovoltaic Systems Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. 30% of cost

Must be placed in service before December 31, 2016.

Residential Small Wind Turbines Has nameplate capacity of not more than 100 kilowatts. 30% of cost

Must be placed in service before December 31, 2016.

Residential Fuel Cell and microturbine system

Efficiency of at least 30% and must have a capacity of at least 0.5 kW.

30% of the cost, up to $500 per .5 kW of power capacity

Must be placed in service before December 31, 2016.

Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles   Based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models

There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Toyota and Honda have already been phased out. Credit is still available for Ford, GM and Nissan.

For more information visit: Fueleconomy.gov Exit ENERGY STAR

Use IRS Form 8910 PDF Exit ENERGY STAR for hybrid vehicles purchased for personal use.

Use IRS Form 3800 PDF Exit ENERGY STAR for hybrid vehicles purchased for business purposes.

Plug-in hybrid electric vehicles   $2,500-$7,500

The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).

Effective January 1, 2009.

1Subject to a $1,500 maximum per homeowner for all improvements combined.

Efficient Cars

Starting January 1, 2009, there is a new tax credit for Plug-in hybrid electric vehicles, starting at $2,500 and capped at $7,500 for cars and trucks (the credit is based on the capacity of the battery system). The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).

Tax credits are available to buyers of hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles. The tax credit amount is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models. These credits are available for vehicles placed in service starting January 1, 2006. For hybrid and diesel vehicles made by each manufacturer, the credit will be phased out over 15 months starting after that manufacturer has sold 60,000 eligible vehicles. For vehicles made by manufacturers that have not reached the end of the phase-out, the credits will end for vehicles placed in service after December 31, 2010. See the IRS Website for updated information Exit ENERGY STAR.

IRS Guidance:

For More Information:

Posted by

 

Jeana Cowie, ABR, CRS, GRI, SRES©
Broker Associate, Real Estate Agent 
  
RE/MAX Real Estate Limited
Oradell, NJ 07649 (in Bergen County, NJ)

www.jeanacowie.net   

Jeana Cowie is a Top RE/MAX Bergen County REALTOR©                            

Over 800+ homes SOLD!! 23 Years of Full Time Bergen County Real Estate Sales Experience

Specializing in Paramus real estate (over 300+ homes SOLD in Paramus alone) handling all of your Bergen County real estate needs, from Allendale to Wyckoff

Top 1% of all RE/MAX agents in NJ

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Re-Blogged 1 time:

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federal tax credits

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Rainer
164,909
Eric Shute
Cameron Real Estate Group - Norwood, MA
MA Real Estate Sales Agent

Hi Jeana, Thanks for all the info. It's nice to have it all on one page!

Nov 14, 2009 07:02 AM #1
Rainmaker
1,116,788
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

I was going to do a post on this today, but why re-invent the wheel. I feel a reblog coming on.

Nov 19, 2009 02:21 AM #3
Rainmaker
1,116,788
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

When I reblog it, it is an absolute mess, so I'm just going to do a short post in my blog and reference yours with a link.

Nov 19, 2009 02:26 AM #4
Rainer
41,741
Terry Osburn
BHHS|Drysdale Properties - Pleasant Hill, CA
Broker Associate

Thanks Jeana,  Great Info...

 

Nov 19, 2009 02:29 AM #5
Rainmaker
613,536
Jeana Cowie
RE/MAX Real Estate Limited - Paramus, NJ
Broker Associate, ABR, CRS, GRI, SRES

Eric & Terry - you are very welcome. Glad to share such useful info!

Jim, I copy & pasted this info direct from the website: energystar.gov/taxcredits.  Maybe doing it that way will come out better for your blog post. Good luck!

Jeana

Nov 19, 2009 05:42 AM #6
Rainmaker
1,098,503
Bob & Leilani Souza
Souza Realty 916.408.5500 - Roseville, CA
Greater Sacramento Area Homes, Land & Investments

Jeana, thanks for putting together such a helpful "energy star" post! :)

Leilani

Nov 19, 2009 04:20 PM #7
Rainer
321,367
Russel Ray, San Diego Business & Marketing Consultant & Photographer
Russel Ray - San Diego State University, CA

That has to be the most extensive post about home improvements and the tax credit that I've read.

Happy Thanksgiving from our house to yours!

Nov 22, 2009 04:52 AM #8
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What's the reason you're reporting this blog entry?

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Rainmaker
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Jeana Cowie

Broker Associate, ABR, CRS, GRI, SRES
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