Earn up to $1,500 in Tax Credits
On February 17th, 2009, President Obama signed into law the "Recovery and Reinvestment Act of 2009." This bill extended tax credits for energy efficient home improvements including windows, doors, insulation, HVAC, and water heaters. Tax credits for these residential products, have been raised to a maximum of $1,500 for improvements made during 2009 and 2010.
This information has been provided by ENERGY STAR® and is not intended to serve as legal or tax advice. Please consult the IRS or a tax accountant to be sure you are eligible for the tax credits available below.
Home Improvements
Home improvement tax credits are available for home improvements "placed in service" from January 1, 2009 through December 31, 2010. The IRS defines "placed in service" as when the property/improvement is ready and available for use.
Home improvement tax credits are available for insulation, replacement windows, water heaters, and certain high efficiency heating and cooling equipment. The chart below outlines the products and credit available. Some products are subject to a maximum of $1,500.
Product Category Product Type Tax Credit Specification Tax Credit Notes Windows & Doors Important Change 5/1/09: Before June 1, 2009: Must meet ENERGY STAR criteria. After June 1, 2009: U-factor <= 0.30 SHGC <= 0.30 30% of cost, up to $1,5002 Not all ENERGY STAR labeled windows and skylights qualify for tax credit. Storm Windows Meets IECC1 in combination with the exterior window over which it is installed, for the applicable climate zone 30% of cost, up to $1,5002 Manufacturer Certification Statement3 will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.)4 that a product may be combined with to be eligible in specific climate zones. U factor <= 0.30 SHGC <= 0.30 30% of cost, up to $1,5002 Not all ENERGY STAR doors will qualify. See www.energystar.gov for details. Storm Doors In combination with a wood door assigned a default U-factor by the IECC1, and does not exceed the default U-factor requirement assigned to such combination by the IECC. 30% of cost, up to $1,5002 Insulation Insulation Meets 2009 IECC & Amendments 30% of cost, up to $1,5002 For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify). Must be expected to last 5 years OR have a 2 year warranty. HVAC Central A/C Split Systems: 30% of the cost, up to $1,5002 For a list of qualified products, go to the Consortium for Energy Efficiency product directory, click on the Air Conditioners and in the "CEE Tier" enter "Residential Advanced Tier 3" for CAC Split Systems and "residential Tier 2" for CAC Package Systems and ASHPs. Note -- not all ENERGY STAR products will qualify for the tax credit. Water Heaters Air Source Heat Pumps Split Systems: HSPF >= 8.5 Package Systems: HSPF >=8 EER >=12 SEER >=14 30% of the cost, up to $1,500² Geo-Thermal Heat Pump Same criteria as ENERGY STAR: Closed Loop: 30% of the cost. All ENERGY STAR labeled geo-thermal heat pumps qualify for the tax credit. Gas, Oil, Propane Furnace or Hot Water Boiler Natural Gas or Propane Furnaces: Oile furnace: AFUE >=90 Gas, Propane or Oil Hot Water Boiler: 30% of the cost, For a list of qualifying products go to the Gas Appliance Manufacturing Association Note - not all ENERGY STAR products will qualify for the tax credit. Advanced Main Air Circulating Fan No more than 2% of furnace total energy use (see www.energystar.gov if the fan qualifies, but the furnace does not). 30% of the cost, up to $1,5002 Gas, Oil, Propane Water Heater Energy Factor >= 0.82 30% of the cost, up to $1,5002 All ENERGY STAR gas tankless water heaters will qualify. There are currently no ENERYG STAR qualified gas storage tank or gas condensing water heaters that qualify For a partial list of qualifying products go to the Gas Appliance Manufacturing Association. Electric Heat Pump Water Heater Same criteria as ENERGY STAR. Energy Factor >= 2.0 30% of the cost, up to $1,5002 All ENERGY STAR electric heat pump water heaters qualify for the tax credit.
EER >=13
SEER >= 16
Package systems:
EER >= 12
SEER >= 14
EER >= 12.5
SEER >= 15
EER >= 14.1
COP >= 3.3
Open Loop:
EER >= 16.2
COP >= 3.6
Direct Expansion:
EER >= 15
COP >= 3.5
AFUE >= 95
AFUE >= 90
or a thermal efficiency of at least 90%.
1Either the 2001 Supplement of the 2000 International Energy Conservation Code or the 2004 Supplement of the 2003 International Energy Conservation Code.
2Subject to a $1,500 maximum per homeowner for all improvements combined.
3A Manufacturer's Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
4Additional information on exterior window features may be viewed at Anatomy of an Energy Efficient Window.
**Please note, not all ENERGY STAR products qualify for a tax credit. These tax credits are available for a number of products at the highest efficiency levels, which typically cost much more than standard products.
Not responsible for errors or omissions. For details see: www.energystar.gov.
