What is the Energy Tax Credit?

On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This law extends the tax credits for energy efficiency into 2011, BUT at lower levels. The levels revert back to those in effect in 2006 and 2007, which were 10% of the cost of the improvement, up to $500, with a $200 max for windows, and several other set maximums.

Highlights:

• $500 lifetime limit. If you got over $500 in these tax credits from 2006 - 2010, you are not eligible for anything more.
• 10% up to $500 for insulation, roofs, and doors.
• Windows capped at $200, but qualification now ENERGY STAR
• Furnace and boilers capped at $150, and all furnaces and boilers must meet 95 AFUE
• $50 for advanced main air circulating fan
• $300 for air conditioners, air source heat pumps, water heaters, and biomass stoves

The credit is for new equipment, in an existing principle residence, owned and used where the tax payer is the original owner of the home.

How much is the Tax Credit?
The Tax Credit is for 10% of the purchase price up to $300. It is available for 2011.

How do I get the Tax Credit?
You can claim the credit on your Federal Income Tax at the end of the year. The credit either increases your tax refund or decreases the amount you have to pay, dollar-for-dollar. This is provided under the terms of the Internal Revenue code Section 25(d)(3)(E). You must retain the receipts of purchase (and installation if applicable) and the Qualification Certificate for tax record keeping purposes. You should consult your tax professional with questions on how to obtain this credit after purchase of a qualifying product.

Certificate of Qualification
You must obtain and retain a "Manufacturer's Certificate of Qualification" in your tax records for products you purchase. For your convenience, the following links will allow you to download the certificates for some of the products we promote. If you do not see a manufacturer listed here, please check the manufacturer's web site for the certificate.

Breckwell Pellet Stoves
Englander Wood & Pellet Stoves
Vogelzang Wood Stoves

 

For full details of the Tax Credit, visit http://energystar.gov/taxcredits