2011 Energy Efficiency Upgrade Tax Credits

Did you replace an old energy zapping item in your / home with a newer, energy-efficient model?  You may be eligible for up to $500 in tax credits.  Unlike a deduction, which only lowers your taxable income, a tax credit actually reduces your tax owed.  Since tax day is right around the corner (this year, it has been extended to Tuesday, April 17, 2012), I thought you might want to know what energy efficiency upgrades might make you eligible for a credit on your 2011 taxes:

• Biomass Stoves - Credit: $300.  Must have a thermal efficiency rating of 75% or higher.
• Heating, Ventilation and Air Conditioning Units/Systems (HVAC) - Credit: $50-$300 for an advanced main air circulating fan ($50), gas propane or hot water boiler ($150), natural gas, propane or oil furnace ($150), air source heat pump ($300) or central air conditioning unit ($300).  Requirements for qualifying vary for each unit installed in your / home.
• Insulation - Credit: 10% of cost (max of $500).  Does not include cost of installation.
• Roofing (Metal and Asphalt) - Credit: 10% of cost (max of $500).  Does not include cost of installation.  Pigmented metal roofs and cooling granule asphalt roofs that meet EnergyStar requirements may qualify.
• Water Heaters (Non-Solar) - Credit: $300.  Gas, oil or propane water heaters must have an energy factor rating of less than or equal to 0.82 or a thermal efficiency rating of 90% or higher.  Electric heat pump water heaters must account for no more than 25% of your / home's total energy consumption
• Windows, Skylights & Doors - Credit: 10% of the cost (max of $500 for doors and $300 for windows).  Does not include cost of installation.  Must be EnergyStar rated.  You don't have to replace all the windows in your home to qualify.  Installing a new window, door or skylight where there wasn't one before may also qualify.

To be eligible for the 2011 energy efficiency upgrade tax credits, you must have replaced these items on an existing home that is your primary residence by December 31, 2011.  Neither newly constructed / homes nor rentals qualify.  You must file the IRS Form 5695 (Residential Energy Credits) along with your 2011 taxes and submit by April 17, 2012.  The amount of your tax credit calculated on IRS Form 5695 should be entered on line 52 of your 1040 form.  Make sure you keep all your receipts as well as the Manufacturer's Certification Statement for each item claimed on your 5695 form for your records.

This post is meant for informational purposes only.  Always consult your tax professional first.

Originally posted on my Northern Virginia Homes real estate blog here: http://northernvirginiahomes.net/2012/02/23/2011-energy-efficiency-upgrade-tax-credits/.