Federal Tax Credits for Consumer Energy Efficiency

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Federal Tax Credits for Consumer 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.

Please note, not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, without a tax credit.

What You Need to Know

What is included in the Federal Tax Credit?

Tax Credit: 30% of cost up to $1,500
Expires: December 31, 2010
Details: Must be an existing home & your principal residence. New construction and rentals do not qualify.

Gas, Propane, or Oil Hot Water Boiler

These are heating units that use water circulated throughout the home in a system of baseboard heating units, radiators, and/or in-floor radiant tubing.

Requirements:
AFUE >= 90
Tax Credit includes installation costs.

Natural Gas or Propane Furnace

A furnace uses the combustion of fuel and air to create heat.

Requirements:
AFUE ≥ 95
Tax Credit includes installation costs.

Oil Furnace

A furnace uses the combustion of fuel and air to create heat.

Requirements:
AFUE ≥ 90
Tax Credit includes installation costs.

Water Heaters (non-solar)

Gas, Oil, Propane Water Heater

Water heating can account for 14%–25% of the energy consumed in your home.

Energy Factor >= 0.82 OR a thermal efficiency of at least 90%.
Tax Credit includes installation costs.

Electric Heat Pump Water Heater

Water heating can account for 14%–25% of the energy consumed in your home.

Energy Factor ≥ 2.0
Tax Credit includes installation costs.

How do I apply for my Federal Tax Credit?

Tax Form

For products "placed in service" in 2009, you need to file the 2009 IRS Form 5695 and submit it with your 2009 taxes (by April 15, 2010).

On the 2009 1040 form, the residential energy tax credit (from Form 5695) is claimed on line 52.

For products "placed in service" in 2010, you would take the tax credit on your 2010 income taxes.

What you need to submit and save:

Save your receipts and the Manufacturer's Certification Statement for your records.

Submit Form 5695 with your taxes.