Federal Energy Efficiency Tax Credits
By Amanda Goucher
The Federal Government continues to provide incentives to homeowners to help
encourage improvements in energy efficiency. Credit opportunities exist for
everything from cars and appliances to homes and buildings. With more available
options for energy-efficient appliances and products, a tax incentive is a
wonderful way for the public to become more aware of green alternatives.
Credits are available for both residential and commercial buildings. Many
credits are based on standards for the American Society of Heating,
Refrigerating and Air-Conditioning Engineers (ASHRAE) or Energy Star, and must
meet International Energy Conservation Code (IECC). Tax credit details for home
-Improvements must be installed between January 1, 2009 and December 31, 2010.
-They must be for your principal residence, except for geothermal heat pumps,
solar water heaters, solar panels, and small wind energy systems, where second
homes and rentals qualify.
-Each must have a Manufacturer Certification Statement3 to qualify.
For record keeping, save the Manufacturer Certification Statement and your
-Claim improvements made in 2009 on your 2009 taxes (filed by April 15, 2010).
Use IRS Tax Form 5695 (2009 version), which will be available in late 2009 or
-If you 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. (Source: EnergyStar.gov)
-$1,500 is the maximum total amount you can claim for products placed in
service in 2009 and 2010 for most home improvements. Exceptions – in effect
through 2016 – are geothermal heat pumps, solar water heaters, solar panels,
fuel cells, and small wind energy systems, which are not subject to this cap.
An eligible residential project could include new roofing using metal or
reflective shingles that meet ENERGY STAR standards. In this case, the tax
credit would be for 30% of the cost of roofing materials only, up to $1,500.
This is one of many examples of residential upgrades. The ENERGY STAR website
and www.dsireusa.org have many more specific examples (and ideas) for green
residential upgrades and describe any stipulations there in.
Tax credits in the commercial sector include a tax deduction of up to $1.80 per
square foot for owners or designers of new or existing commercial buildings that
can save at least 50% of the heating and cooling energy of a building meeting
ASHRAE Standard 90.1-2001. Windows, doors, and skylights are also a great way to
take advantage of this credit program.
For a complete list of products and requirements, qualifications, and
instructions on how to apply for these credits, visit the Energy Star website
(energystar.gov/taxcredits). You can also find Frequently Asked Questions about
the tax credits there.
Please contact us if you have any questions or comments.