Do You Qualify for an Energy Efficient Tax Credit?

HVAC contractor

Yes, it’s tax season again and we know you all love doing your taxes. That’s why our HVAC contractor is here – to help you save even more with energy efficient tax credits.

According to the IRS, you can receive a tax credit if you have an energy-efficient home. If you made an improvement to your home last year, you may qualify for the Residential Energy Efficient Property Credit or the Non-Business Energy Efficient Property Credit.

Residential Energy Efficient Property Credit

This credit counts for “30 percent of the cost of alternative energy equipment installed on or in a home. This includes the cost of installation.”

Qualifying equipment includes:

  • Solar hot water heaters
  • Solar electric equipment
  • Wind turbines
  • Fuel cell property

Unless your equipment is fuel cell property, the home that qualifies doesn’t need to be your main home (though it does need to be in the U.S.). In addition, there is no dollar limit on the credit for most types of property.

Non-Business Energy Efficient Property Credit

This credit has two parts: One is worth “10 percent of the cost of certain qualified energy-saving items added to a taxpayer’s main home last year” and doesn’t include the cost of installation.

Qualifying installed items include:

  • Additional insulation
  • Energy-efficient exterior windows
  • Energy-efficient exterior doors
  • Certain roofs

The other part of the credit is not a percentage of the cost of the equipment, but includes installation costs.

Qualifying equipment includes:

  • Certain high-efficiency HVAC systems
  • High-efficiency water heaters
  • Stoves that burn biomass fuel

This credit can be applied to your home as long as it’s in the U.S. and is your main  home. Each type of property yields a different dollar amount, with a maximum lifetime credit limit of $500. (However, taxpayers may only use $200 of this limit for windows.)

If your home qualifies for either the Residential Energy Efficient Property Credit or the Non-Business Energy Efficient Property Credit, use the Form 5695 to claim your tax credit.

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