If you upgraded one or more of the following systems last year, you may be eligible to take a tax credit — up to $500 — on your return.
The energy tax credits are small, but at least a credit is better than a deduction:
Limits on IRS energy tax credits besides $500 max
Certain systems capped below $500
No matter how much you spend on some approved items, you’ll never get the $500 credit — though you could combine some of these:
System | Cap |
New windows | $200 max (and no, not per window—overall) |
Advanced main air-circulating fan | $50 max |
Qualified natural gas, propane, or oil furnace or hot water boiler | $150 max |
Approved electric and geothermal heat pumps; central air-conditioning systems; and natural gas, propane, or oil water heaters | $300 max |
And not all products are created equal in the feds’ eyes. Improvements have to meet IRS energy-efficiency standards to qualify for the tax credit. In the case of boilers and furnaces, they have to meet the 95 AFUE standard. EnergyStar.gov has the details.
Tax credits cover installation — sometimes
Rule of thumb: If installation is either particularly difficult or critical to safe functioning, the credit will cover labor. Otherwise, not. (Yes, you’d have to be pretty handy to install your own windows and roof, but the feds put these squarely in the “not covered” category.)
Installation covered for:
Installation not covered for:
How to claim the energy tax credit
This article provides general information about tax laws and consequences, but isn’t intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice, and remember that tax laws may vary by jurisdiction.
4.97/5.0
706.410.7403 - DIRECT
404.420.2362 - FAX
“Clients Resource App”