Home Energy-Efficiency Improvement Tax Credit
Save Money, Get Money
You can get a one-time tax credit of up to $500 in total for installing
efficient new windows, insulation, doors, roofs, and heating and cooling
equipment in your home.
Who gets it? Individuals who install
specific energy-efficient home improvements.
What energy-efficient home improvements are
eligible? The overall $500 cap can be reached in several ways
with the purchase and installation of energy-efficient products:
Exterior windows (including skylights) 10 percent of the total
cost, up to $200.
Insulation, exterior doors, or pigmented metal roofs: 10 percent
of the total cost, up to $500. Duct sealing and weather stripping or foam
sealants may also qualify for the credit, depending on the IRS rules.
Central air conditioner, heat pump, or water heater: up to $300
towards the full purchase price.
Furnace or boiler: up to $150 towards the full purchase price,
and/or $50 for a furnace with an efficient air circulating fan.
In addition, to be eligible for the federal tax credits:
Windows, doors, and insulation must meet the requirements of
the International Energy Conservation Code, a model energy code for
buildings. ENERGY STAR windows will almost always qualify.
Metal roofs must have pigmented coatings that meet ENERGY STAR
requirements.
Heating and cooling equipment must meet stringent efficiency
requirements – not even all ENERGY STAR products will qualify. Manufacturers
and retailers likely will be able to tell you which products qualify.
All the improvements must be installed in or on the taxpayer’s principal
residence in the United States.
When are they available? The home
improvement tax credits apply for improvements “placed in service” from
January 1, 2007, through December 31, 2007. They are not available in 2007.
The IRS defines “placed in service” as when the products or materials are
ready and available for use – this would generally refer to the
installation, not the purchase.
What do I need to do to get the tax credit?
The IRS will write rules on how to claim the tax credit and publish any
necessary forms. At the least, you will need to keep receipts proving that
you purchased the improvements.