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Energy-efficiency federal tax credits  Smart Choices Archive

Energy-efficiency federal tax credits

Save money on your taxes and save on your energy bills, too, when you update your home using these guidelines.

Tax Information

The federal energy-efficiency tax credits in effect for 2012 have been extended through 2013. If you either did some energy-efficiency retrofit projects in 2012 or built a home, or are planning similar work in 2013, be sure to review the tax credits to see if you qualify. There are very specific requirements in each area, so be sure you understand the options before planning the work. Talk to your contractor, your tax advisor, and check out ENERGY STAR® for more details.

Existing home tax credit (credit 25C)
If you are considering any of these home improvements and have not yet used up your $500 eligibility, you can receive a credit worth 10 percent of the project’s cost up to the $500 total. The areas are: heating, cooling, and ventilation (HVAC); insulation; windows and doors; non-solar water heaters; biomass stoves; and roofs. You can use this credit for projects you undertook in 2012 or projects you are planning for 2013. Find details.

New home tax credit
Home builders are eligible for a $2,000 tax credit if the building achieves a 50 percent energy savings for heating and cooling over the 2006 International Energy Code. At least a fifth of the savings has to come from building envelope improvements. This credit also applies to manufactured homes meeting particular standards. While a builder who adheres to ENERGY STAR home building standards may qualify for this credit, it is not guaranteed. If you are planning to build a home this year, talk with your contractor about building to achieve the tax credit. The builder will benefit from the credit, and you will benefit from lower utility bills for the life of the home. See details.

Residential energy efficiency (credit 25D)
This credit applies to both new and existing homes. Installing a geothermal heating and cooling unit, or installing solar or wind energy units or fuel cells, are all covered by this credit, which does not expire until 2016. Consumers are offered 30 percent of the cost of the unit, with no upper limit. The credit includes installation costs as well. See details.




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