As noted earlier, the federal energy efficiency tax credit has been extended through 2011, but the federal government has significantly changed the credit limits and eligibility requirements. And we’ve been getting a lot of questions about this. So let’s try to clarify things. Here’s how it looks in 2011.
For measures installed between January 1, 2011 and December 31, 2011, the credit is generally 10% of costs on qualifying energy efficiency improvement measures, up to a maximum of $500. However, special limits have been put on certain qualifying equipment and measures. For example:
- 10% up to $500 for insulation, roofs, and doors
- High efficiency furnaces and boilers – $150
- Air-Conditioners and heat pumps – $300
- Main air circulating fans – $50
- ENERGY STAR Windows – 10% capped at $200
- Energy efficient water heaters – $300
The $500 cap will apply to anyone who received the credit from Jan. 1, 2005 to present. Thus, if you’ve claimed a cumulative credit of $500 or more since Jan. 1, 2005, you won’t be eligible for the 2011 extension. If you’ve claimed less than $500 cumulatively, you are eligible for the difference with qualifying measures. Check out our more complete summary of the 2011 credits and FAQ for further details.
Certain renewable energy tax credits for solar PV, solar hot water, and geothermal, for example, remain in place at 30% of cost, with no cap.
[Note: 2009-2010 tax filers, the 2010 tax credit information is still available—don’t forget to claim any credits you’re eligible for when you file your 2010 tax return.]
Tags: $1500, $500, 10%, 2010 tax credit, 2011 energy tax credit, 2011 tax change, air conditioner, boiler, energy-efficiency tax credit, federal, furnace, home energy, home improvement, home star, insulation, IRS, rebates, tax credit extension, windows