Homeowners and business owners making energy efficient repairs from January 1, 2006-December 31, 2007, may be eligible for federal tax credits under 2005 energy legislation.
The legislation allows homeowners a tax credit of up to $500 for 10 percent of qualified energy efficiency improvements. This can include windows and doors, some appliances, heating and cooling equipment and insulation improvements. Improvements must meet minimum standards set by the legislation. Tax credits must be taken in the tax year the improvement was made.
Homeowners do not need independent verification, or an inspection, to take advantage of this rule. Homeowners are expected to retain a record of receipts and a manufacturer's certification statement with the tax form. The certification statements are generally available on manufacturer's websites. New home builders taking advantage of the $2,000 tax credit included in the Energy Act, are required to have an inspection performed.
Because this Act is relatively new, changes in the interpretation are possible. For specific rules on the Energy Policy Act tax credit provisions, check with the Internal Revenue Service.