Federal Tax Credits for Energy Efficiency

Tax credits are available at 30% of the cost, up to $1,500, in 2009 & 2010 (for existing homes only) for:
• Windows and Doors
• Insulation
• Roofs (Metal and Asphalt)

Here are some frequently asked questions:

Question: How do I apply for the tax credit? What tax form do I need for the energy efficiency tax credits?

Answer: To claim the tax credit for energy efficient products "placed in service" in 2009, you will need to file the 2009 IRS Form 5695 and submit it with your 2009 taxes (by April 15, 2010). Currently, only a draft version of the 2009 IRS Form 5695 available (without the instructions section). For products "placed in service" in 2010, you would take the tax credit on your 2010 taxes.
On the Draft 2009 1040 form, the residential energy tax credit (from Form 5695) is claimed on line 52.

Also save your receipts and the Manufacturer's Certification Statement for your records. A Manufacturer’s Certification Statement 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.

Question: Is the $1,500 tax credit available for each product? Can I get $1,500 for windows and another $1,500 for a new HVAC system? Can I get $1,500 in 2009 and another $1,500 in 2010? Can two people living in the same home both get the $1,500 credit?

Answer: Even if you purchase multiple products you can only get a maximum of $1,500 over the 2-year period (2009 & 2010). Basically you can spend up to $5,000 during this 2 year period on a single or multiple products, and get 30% or $1,500 (30% of $5,000 = $1,500) back as a tax credit. If you get the entire $1,500 credit in 2009, then you can't get anything additional in 2010.

Two or more unmarried people living in the same home who own it jointly are each eligible for the tax credit on the amount of money they each individually spend to make home improvements. Example: Person A buys windows for $5,000, and gets the entire $1,500 (30% of $5,000 = $1,500) tax credit, Person B buys a central air conditioner for $3,000 and gets back $900 (30% of $3,000 = $900).

Note: The $1,500 maximum does not apply to geothermal heat pumps, solar water heaters, solar panels, fuel cells, and wind generators. These are all eligible for a 30% tax credit with no upper limit. However, the tax credit for fuel cells is limited to $500 per .5 kW of power capacity. The tax credit with no upper limit is completely separate from the one limited to $1,500 - so you can get both. For example, you can get $1,500 back for new windows, and $3,000 back for a new geothermal heat pump - for a total tax credit of 4,500. Here are some other issues to consider
All information here was obtained and can be further reviewed at energystar.gov/taxcredits