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Tax Credits for Energy Efficiency
If you purchase an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit. Below you will find an overview of the federal tax credits for energy efficiency.
Additional state and local incentives may also be available; visit the Database of State Incentives for Renewables and Efficiency to find out if you are eligible for other incentives. If you are purchasing appliances, learn about the state rebates for ENERGY STAR appliances.
How to Claim Your Tax Credit
Improvements made in 2009 will be claimed on your 2009 taxes, filed by April 15, 2010. You will use the 2009 version of IRS Tax Form 5695; this form will be available in late 2009 or early 2010. All products must have a Manufacturer Certification Statement to qualify; save your receipts and the Manufacturer Certification Statement for your records.
Eligible Products
The following products are eligible for tax credits at 30% of the cost, up to $1,500, in 2009 and 2010 (for existing homes only):
- Insulation
- Windows and Doors
- HVAC
- Roofing (Metal and Asphalt)
- Water Heaters (non-solar)
- Biomass Stoves
For most of these home improvements, $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 and 2010. These improvements must be "placed in service" from January 1, 2009 through December 31, 2010 and must be for taxpayer's principal residence.
Tax credits for the following products are available at 30% of the cost, with no upper limit, through 2016:
- Geothermal Heat Pumps
- Solar Energy Systems (including Solar Water Heaters)
- Small Wind Energy Systems
- Fuel Cells
These products are eligible for tax credits if they are installed in existing or new homes. Geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems also qualify if they are installed in a second home.
In addition to home improvements, tax credits are available for some vehicles.
| Product | Specification |
|---|---|
| Insulation | Meets 2009 International Energy Conservation Code (IECC) & Amendments For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify). |
| Credit: 30% of cost, up to $1,500 (2009 and 2010) | |
| Product | Specification |
|---|---|
| Exterior Windows and Skylights | Before June 1, 2009: Must meet ENERGY STAR criteria; use either ENERGY STAR labels or manufacturer certification statements to document eligibility. After June 1, 2009: U factor <= 0.30; SHGC <= 0.30 Not all ENERGY STAR labeled windows and skylights qualify. |
| Storm Windows | 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 Obtain a manufacturer certification statement to document eligibility. |
| Exterior Doors | Before June 1, 2009: Must meet ENERGY STAR criteria; must have manufacturer certification statement to document eligibility. After June 1, 2009: U factor <= 0.30; SHGC <= 0.30. Not all ENERGY STAR labeled doors qualify. |
| Storm Doors | In combination with a wood door over which it is installed: 1. has a U-factor and SHGC of 0.30 or below 2. Meets the IECC |
| Credit: 30% of cost, up to $1,500 (2009 and 2010) | |
| Product | Specification |
|---|---|
| Central Air Conditioning | Split Systems: EER >=13; SEER>= 16 Package systems: EER >= 12; SEER >= 14 Not all ENERGY STAR products qualify. See ENERGY STAR's FAQ for more information on qualifying air conditioners. |
| Air Source Heat Pumps | Split Systems: HSPF >= 8.5; EER >= 12.5; SEER >= 15 Package systems: HSPF >= 8; EER >= 12; SEER >= 14 Not all ENERGY STAR products qualify. See ENERGY STAR's FAQ for more information on qualifying heat pumps. |
| Furnaces and Boilers | Natural Gas or Propane Furnace: AFUE >= 95 Oil Furnace: AFUE >= 90 Gas, Propane, or Oil Hot Water Boiler: AFUE >= 90 Not all ENERGY STAR products qualify. See ENERGY STAR's FAQ for more information on qualifying furnaces and boilers. |
| Advanced Main Air Circulating Fan | No more than 2% of furnace total energy use. See ENERGY STAR FAQ if the fan qualifies but the furnace does not (and vice versa). |
| Credit: 30% of cost, up to $1,500 (2009 and 2010) | |
| Product | Specification |
|---|---|
| Metal Roofs, Asphalt Roofs |
All ENERGY STAR qualified metal and reflective asphalt shingles. See ENERGY STAR's FAQ for more information on qualifying roofs. |
| Credit: 30% of cost, up to $1,500 (2009 and 2010) | |
| Product | Specification |
|---|---|
| Gas, Oil, Propane Water Heater | Energy Factor >= 0.82 or a thermal efficiency of at least 90%. See ENERGY STAR FAQ on qualifying water heaters. |
| Electric Heat Pump Water Heater | Energy Factor >= 2.0. All ENERGY STAR qualified heat pump water heaters will qualify; none exist today, but more are expected on the market by the end of 2009. See ENERGY STAR FAQ on qualifying water heaters. |
| Credit: 30% of cost, up to $1,500, including installation (2009 and 2010) | |
| Product | Specification |
|---|---|
| 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. |
| Credit: 30% of cost, up to $1,500 (2009 and 2010) | |
| Product | Specification |
|---|---|
| Geothermal Heat Pump | Closed Loop: EER >= 14.1; COP >= 3.3 Open Loop: EER >= 16.2; COP >= 3.6 Direct Expansion: EER >= 15; COP >= 3.5 All ENERGY STAR geothermal heat pumps qualify. |
| Credit: 30% of cost; no upper limit. Must be "placed into service" before December 31, 2016. | |
| Product | Specification |
|---|---|
| Solar Water Heater | All ENERGY STAR solar water heaters qualify. 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 water must be used in the dwelling. The credit is not available for expenses for swimming pools or hot tubs. The system must be certified by the Solar Rating and Certification Corporation (SRCC). |
| Photovoltaic Systems (Solar Electricity) | Photovoltaic systems must provide electricity for the residence and must meet applicable fire and electrical code requirement. |
| Credit: 30% of cost; no upper limit. Must be "placed into service" before December 31, 2016. | |
| Product | Specification |
|---|---|
| Residential Small Wind Turbines | Has nameplate capacity of not more than 100 kilowatts (kW). |
| Credit: 30% of cost; no upper limit. Must be "placed into service" before December 31, 2016. | |
| Product | Specification |
|---|---|
| Residential Fuel Cell and Microturbine System | Efficiency of at least 30% and must have a capacity of at least 0.5 kW. |
| Credit: 30% of the cost, up to $500 per .5 kW of power capacity. Must be "placed into service" before December 31, 2016. | |
| Product | Specification |
|---|---|
| Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles | There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. See Fueleconomy.gov to find out which vehicles are still eligible. Use IRS Form 8910 for hybrid vehicles purchased for personal use. Use IRS Form 3800 for hybrid vehicles purchased for business purposes. The 2009 forms will be available late 2009 or early 2010. Credit is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models |
| Plug-in Hybrid Electric Vehicles | The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits). Credit: $2,500-$7,500, based on capacity of the battery system. |
| Credit: Varies; see above. | |