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Energy Tax Credits

The energy credits that expired 12/31/07 are back for tax year 2009.

Energy saving improvements to your home, such as insulation, windows and doors, furnaces, and water heaters may provide a tax credit on your 2009 tax return. Also, the purchase of certain energy efficient cars may provide tax credits.

• Must be "placed in service" from January 1, 2009 through December 31, 2010
• Must be for taxpayer's principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes qualify)
• $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
• Must have a Manufacturer Certification Statement to qualify. A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
• For record keeping, save your receipts and the Manufacturer Certification Statement
• 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
• If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.

Visit the Energy Star website for additional detail and qualifying criteria.