Be sure and review the 2010 tax credit information and file your claim if you made eligible upgrades last year!
Below are the FAQ's pertaining to the 2010 Federal Income Tax Credit:
Note: Click here for information about the 2011 tax credit.
Q: How do I claim the 2010 tax credit?
A: You will need to include IRS Form 5695 when you file your taxes. You need to keepreceipts proving that you purchased the improvements between 1/01/2010 and12/31/2010 and a copy of the manufacturer's certification, which yourcontractor should be able to provide. Consult your accountant or taxpreparer for additional guidance.
Q: What is the Federal Stimulus Tax Credit?
A: The Federal Stimulus Tax Credit is a group of enhancements that were made to the 2008 tax credits for energy-efficient home improvements made from January 1, 2009 through December 31, 2010 (through 2016 for renewable energy sources).
Q: What does this mean for me?
A: This means that you are eligible for a tax credit if you make qualified energy-efficiency improvements to your home.
Q: How much is the tax credit for?
A: For most improvements, the tax credit is 30% of the cost, up to $1,500.
Q: Does that include labor and material?
A: For improvements on the Shell of your home, (windows, doors, roofing and insulation), the tax credit covers the 30% of cost of materials. Improvements such as new HVAC systems, heat pumps and boilers will cover 30% of the total installed cost, both labor and material costs.
Q: What about renewable energy sources?
A: Solar water heaters, solar panels, and geothermal heat pumps are a 30% tax credit for labor and material cost with NO cap on the credit.
Q: What if I made improvements before 2009, will a tax credit apply?
A: Unfortunately no, the tax credit only applies to energy improvements installed after January 1, 2009
Q: When do the tax credits expire?
A: December 31, 2016 for renewable energy sources and December 31, 2010 for all other energy-efficiency improvements.
Q: Could this apply to my second property?
A: This is applicable to the taxpayers Primary Residence only. Solar water heaters, solar panels, and geothermal heat pumps may apply to second homes or rentals.
Q: What about energy-efficient appliances?
A: Federal tax credits do not apply to small appliances. Local state and city credits may be available.
Q: Can I use the Federal tax credits in 2009 and 2010?
A: Yes, but the Federal tax credit has a lifetime cap of $1,500 except for renewable energy sources. Therefore, once you reach the $1,500 limit, you can no longer apply the tax credit.
Home Improvements
With the passage of the ARRA or "Stimulus" package, tax credits are now available for energy-saving home improvements:
- Energy-efficiency improvements must be installed from January 1,2009 through December 31, 2010 (renewables go through 2016-Hint:go for efficiency first!)
- For energy-efficiency, improvement must be for taxpayer's principal residence
- For renewables (geothermal heat pumps, solar water heaters, solar PV, and wind) second homes and rentals qualify
- $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most energy-efficiency improvements, but qualifying renewables are not subject to this cap.
- Save your receipts and the "Manufacturer Certification Statement" (your contractor should be able to supply this) for tax record keeping purposes.
- Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) - use IRS Tax Form 5695 (2009 version) - it will be available late 2009 or early 2010
Criteria for Energy-Efficiency Measures
($1,500 maximum)
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Insulation
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Meets 2009 IECC & Amendments. For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify).
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30% of material cost, up to $1,500
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Exterior Windows and Skylights and Exterior Doors
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U factor <= 0.30
SHGC <= 0.30
Note, before June 1, 2009 all ENERGY STAR windows qualify. After June 1, 2009, only windows that meet the above specs qualify.
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30% of material cost, up to $1,500
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Storm Windows
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In combination with the exterior window over which it is installed:
1. has a U-factor and SHGC of 0.30 or below
2. Meets the IECC
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30% of material cost, up to $1,500
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Storm Doors
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In combination with a wood door over which it is installed:
1. has a U-factor and SHGC of 0.30 or below
2. Meets the IECC
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30% of material cost, up to $1,500
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Metal Roofs,
Asphalt Roofs
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All ENERGY STAR qualified metal and reflective asphalt shingles
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30% of material cost, up to $1,500
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Central A/C
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Split Systems: EER >=13 SEER >= 16 Package systems: EER >= 12 SEER >= 14
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30% of installed cost, up to $1,500
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Air Source Heat Pumps
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Split Systems: HSPF >= 8.5 EER >= 12.5 SEER >= 15 Package systems: HSPF >= 8 EER >= 12 SEER >= 14
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30% of installed cost, up to $1,500
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Natural Gas or Propane Furnace
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AFUE >= 95
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30% of installed cost, up to $1,500
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Oil Furnace
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AFUE >= 90
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30% of installed cost, up to $1,500
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Gas, Propane, or Oil Hot Water Boiler
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AFUE >= 90
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30% of installed cost, up to $1,500
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Advanced Main Air Circulating Fan
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No more than 2% of furnace total energy use-applies to cost of fan only unless the furnace/AC also qualifies.
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30% of installed cost, up to $1,500
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Gas, Oil, Propane Water Heater
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Energy Factor >= 0.82
or a thermal efficiency of at least 90%.
All ENERGY STAR tankless water heaters will qualify.
There are currently no ENERGY STAR qualified gas storage tank or gas condensing water heaters that qualify.
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30% of installed cost, up to $1,500
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Electric Heat Pump Water Heater
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Same criteria as ENERGY STAR: Energy Factor >= 2.0
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30% of installed cost, up to $1,500
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Biomass Stove
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Stove which burns biomass fuel to heat a home or heat water.
Thermal efficiency rating of at least 75% as measured using a lower heating value.
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30% of installed cost, up to $1,500
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Criteria for Renewable Energy Measures
(no maximum)
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Geo-Thermal Heat Pump
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Same criteria as ENERGY STAR: Closed Loop: EER >= 14.1 COP >= 3.3 Open Loop: EER >= 16.2 COP >= 3.6 Direct Expansion: EER >= 15 COP >= 3.5
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30% of installed cost
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Solar Water Heating
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At least half of the energy generated by the "qualifying property" must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.
The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. The system must be certified by the Solar Rating and Certification Corporation (SRCC).
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Photovoltaic Systems
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Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.
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Residential Small Wind Turbines
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Has nameplate capacity of not more than 100 kilowatts.
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Residential Fuel Cell and microturbine system
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Efficiency of at least 30% and must have a capacity of at least 0.5 kW.
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30% of the cost, up to $500 per .5 kW of power capacity
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