Time is Running Out on Federal Tax Credits

November 04, 2011

Federal tax credits may be available for improvements to your home’s energy-efficient features, including heating and cooling equipment, water heaters, windows, and insulation-- as long as the improvements are completed by the end of 2011. If you have already made improvements, read on to find out if you may be eligible. If you are thinking about making improvements soon, use this listing of available tax credits that expire on December 31, 2011 to help you decide. Here are some tips:

  • $500 is the lifetime limit on the credits expiring in 2011. If you received credits between 2006 and 2010, check to ensure you haven’t met your limit.
  • Use IRS Form 5695 to claim your renewable and efficiency credits.
  • Be sure you’re saving receipts and Manufacturer Certification Statements.
  • In general, improvements must be made to a primary residence, not vacation or rental homes.
  • Some credits do not include installation costs.
  • Not all ENERGY STAR products qualify.

Now that you have the basics, here are some products that must be installed by the end of 2011 for credit; visit irs.gov for a full list and restrictions.

  • Heating and cooling items including heat pumps, central air conditioning systems, and furnaces and boilers. Credits can range from $50 to $300. Each type of product has its own requirements for eligibility, so do your research before you buy.
  • Insulation’s credit is 10% of the cost up to $500. Normal types of bulk insulation qualify, as well as products that seal air leaks, including house wrap, weather-stripping, and sealing spray foam and caulk, provided they have a Manufacturer’s Certification Statement. The tax credit excludes installation costs.
  • Metal and asphalt roofs carry a 10% credit, up to $500,not including installation. Asphalt roofs must have “appropriate cooling granules” and metal roofs must have “appropriate pigmented coatings” to qualify. As a guideline, if either roofing material is ENERGY STAR qualified, it is acceptable. .
  • For water heaters, the tax credits are limited to gas tankless and electric heat pump water heaters. These will both qualify you for $300 in credit, including installation costs. Electric storage tank and tankless water heaters, as well as gas storage tank water heaters, do not qualify.
  • Windows must be ENERGY STAR qualified and will earn 10% of the cost, up to $200. Installation is not included. You can claim a credit even if you only install one window or if you add a window where there was not one previously.
  • Doors and skylights must also be ENERGY STAR qualified and earn 10% of the cost up to $500; installation is not included.

Source: energy.gov/energysaver/energy-saver

Last Updated: June 09, 2023