The federal government is currently offering two tax credits to help assist with the total cost of energy efficient products or upgrades. Both credits require a large initial investment in order to produce years of utility savings. .
The underlying intention and incentive behind this unique government-funded opportunity is a mutually beneficial arrangement for the homeowner to save money while boosting the US economy through market expansion from increased demand.
Only certain highly efficient products qualify and the credit is only eligible if purchased before the end of December, in which case they can be deducted from your taxes.
Energy Efficiency Tax Credit:
- 10% of cost up to $500 or a specific amount from $50 - $300
- Expires on December 31, 2011
- Existing home & principal residences
- New construction and rentals do not qualify.
This credit will offer financial help for both improvements to the home shell and installation of any qualifying energy-efficient heating and cooling systems including:
- Biomass Stoves
- Heating Ventilating AC (HVAC)
- Water Heaters
- Windows & doors
The extended renewable-energy credit is slightly more flexible, allowing both primary and secondary homes to qualify, as do both new and existing homes.
Renewable Tax Credit:
- 30% of cost with no upper limit.
- Expires December 31, 2016.
- Existing homes & new construction qualify.
- Both principal residences and second homes qualify.
- Rentals do not qualify.
Applicable for the following products:
- Geothermal Heat Pumps
- Small Wind Turbines
- Solar Energy Systems
How to Apply For a Tax Credit On Your Energy Efficient Product
If installed before December 31, 2011, the credit can be applied for qualifying products through your 2011 taxes by filing IRS form 5695. Dissimilar to a deduction, the credit will function as a reimbursement, lowering your tax burden by up to $500.
Learn more by visiting Energy Star