Tax Credits for Energy Efficient Homes

Summer is fun and everything, but depending on where you’re living, the heat is anything but pleasant. You want to stay cool during the summer months; however, you don’t want a high utility bill by having air conditioning on full blast.
A money-saving alternative is amending your home with energy-efficient appliances and upgrades. And thanks to the Residential Energy Efficient Property Credit, you can receive tax breaks on these qualified home equipment:

  • fuel cell property
  • solar water heaters
  • solar electric systems
  • geothermal heat pumps
  • small wind energy property

Home Energy Deductions
This tax break also applies to relatively easy home energy improvements such as installing energy efficient exterior windows, adding insulation, or connecting heat and air conditioning units. Qualifying homeowners making energy changes to their primary residences are eligible for 10% credit with the following items:

  • Up to $200 for energy efficient windows
  • Up to $150 for an efficient furnace or boiler
  • Up to $50 for an advanced main circulating fan
  • Up to $300 for other improvements including insulation and heating and air conditioning systems

Residential Energy Efficient Credit Limits
As refreshing as these energy tax claims sound, there are some limitations to their availability. The total amount you can deduct is only $500 – and that’s a lifetime amount per taxpayer, which means once the limit is reached, you can never claim it again.

There’s a two-year window of time for you to claim these energy efficient credits. If the date of installation exceeds two years, you won’t be able to file for any deductions regarding the appliance.

Also, the availability of these credits lasts throughout this tax year; however, that doesn’t mean it will be available next year. This year may be your last chance to take advantage if you haven’t reached the lifetime limit or not outside the two-year threshold.

How To Claim
You can use IRS Form 5695 to claim your credits and consult with your local tax professional for assistance with completing the form. If you need more time to get your full personal tax return in order, visit us here at You can e-file IRS Form 4868 and automatically get approved for six extra months to file your return.

Our live, e-file professionals in Rock Hill, South Carolina, are here for you throughout the entire e-filing process. Give us a call with any questions at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST. We also offer 24/7 email assistance with [email protected].

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