Take the Chill Off at Home with $1,500 Energy-Efficiency Tax Credit

Deductions and Credits

If you’d like to lower your home heating bill this winter, the government has a hefty tax credit that could help.

By making certain improvements to your home, such as installing new, energy-efficient doors and windows or insulation, you could get a credit worth 30 percent of the cost. Spend $1,000 on a draft-free new front door, for example, and receive $300 off on your taxes.

For every dollar you spend on qualified improvements, you get 30 cents back. The improvements include hot water heaters, furnaces and circulating fans.

Basically, the government gives you money to help you save energy. And that helps you save money. It’s part of the 2009 economic stimulus plan.

What you need to know

There are a few rules, of course.

The credit can be taken in both 2009 and 2010, but the limit is $1,500 over both years.

The improvements must be to your primary home. They can include various energy-saving upgrades such as new hot water heaters, furnaces and circulating fans.

And, here’s the sticky part, they must meet certain energy-efficiency requirements. These are all spelled out at the government’s Energy Star web site.

Wind and solar production

If you’re feeling really ambitious, you could go for a much larger credit.

Instead of merely saving energy, you could start making your own renewable energy. You could get a 30 percent credit on the cost of installing small wind turbines, solar water heaters and solar panels.

This tax break is available through 2016 and there’s no dollar cap on the size of the credit. And, of course, the wind and the sun get thrown in for free.

Comments (17) Leave your comment

  1. I am self employed and claimed the residential energy credit for my 31,000 solar electric system on my current version of Turbo Tax (2011). My software credited me with 1/3 of the credit value and rolled over 7,000 to 2012. I need the credit this year but it seems as though the software did not touch my self employment tax liability. Can you advise me as to how I might solve this problem?

  2. I’m a little fuzzy on the this. If we get a refund yearly how can we benefit with an energy tax credit? Do we get the entire 30% of a photovoltaic system?

  3. We have insaleed new windows,siding and a new door..all energy efficant..because my husband is on social security disability he does not pay much in taxes but we spent a greta deal to make the home we live in with the windows and doors we can not take the tax deduction??

  4. Much like the question on January 29th- ” I installed energy efficient windows in 2009. Why does my Deluxe Turbo tax say that windows are not eligible for the energy efficient discount?”

    I have the Home and Business version. I know the windows that I installed qualify. TurboTax says exterior windows do not qualify. Help!

  5. I see the same thing – nowhere to claim this credit in TurboTax. Specifically, I have a High Efficiency Hot Water Heater that was installed mid-year and it absolutely/positively was credit-eligible then thru now – where is the exact input in TurboTax located????

  6. TurboTax Home & Business 2008 software will not allow a tax credit for a new qualifying, energy star approved natural gas heating system. The software will only allow tax credits for solar, wind, geothermal and fuel cells. Is this correct??

  7. I have the same question a Krystin: Where do I find a place for an approved high efficiency gas furnace improvement?

    I see the section for blower motors, but not the furnace itself.

  8. I suspect a bug in the TurboTax software is preventing us from downloading the tax form for energy tax credit on high efficiency central air and heating systems installed in 2009. Intuit has been claiming for 3 months now that the IRS has not released this form. Not true.

  9. When I get to the Energy Credit part of Turbo Tax, all it refers to is the solar,wind and geothermal improvements. Where would I find a place for an approved high efficiency gas furnace improvement?

  10. I was having the same problem, but after doing a check for updates it lets me enter for this credit for energy efficient windows.

  11. I istalled energy efficient windows in 2009. Why does my Deluxe Turbo tax say that windows are not eligible for the energy efficient discount?

  12. Which versions of TurboTax will be equipped to handle this tax credit? I made invested in energy efficiency in my home this year, and would like to be sure I get some money back as a result.

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