Expiring Eco-Friendly Tax Credits Can Help with 2011 Taxes
The clock is ticking. If you haven’t filed your 2011 taxes yet, you still have time to take advantage of tax credits for home energy improvements you made last year.
According to the ENERGY STAR website, if you’ve made any of the following improvements to your primary residence during 2011, you’re eligible take advantage of the following credits on your federal tax returns:
Biomass Stoves: Stoves that use biomass fuels to heat your home and hot water are eligible for a $300 tax credit, as long as they carry a thermal efficiency rating of at least 75 percent.
Heating, Ventilation and Air Conditioning (HVAC): Federal tax incentives include a variety of energy-efficient heating and cooling upgrades, such as these:
- Advanced Main Air Circulating Fan: This fan is used to blow air through duct systems and qualifies for a $50 tax credit.
- Air Source Heat Pumps: These pumps act as an alternative to furnaces and air conditioners in moderate climates. Since they move heat rather than generate it, they provide up to four times more energy than they use. They qualify for a $300 tax credit.
- Central Air: Depending on the unit installed, you may be eligible to receive a $300 tax credit for the purchase of the equipment. Be sure to ask your contractor to verify that the unit qualifies and ask for a copy of the Manufacturers’ Certification Statement.
- Gas, Propane or Oil Hot Water Boiler: These heating units circulate hot water through radiators, baseboard units, or in-floor tubing. The tax credit? $150 for qualifying boilers, including installation.
- Natural Gas, Propane or Oil Furnace: In these furnaces, a combination of fuel and air is combusted to create heat. They qualify for a tax credit of $150.
Insulation: Adding or upgrading insulation can provide for a tax credit of 10 percent of the purchase cost up to $500. This includes standard bulk-style insulation and products that seal air, as long as they come with a Manufacturer’s Certification Statement.
Roofs: Roofs installed using qualified products can earn you a credit of 10 percent, up to $500 for the cost of the materials. This credit does not take into consideration installation costs.
Water Heaters (non-solar): Installation of a non-solar water heater that meets certain energy requirements will qualify for a $300 tax credit.
Windows and Doors: The addition of ENERGY STAR windows and doors will qualify for a tax credit of 10 percent of the purchase cost. The credit for doors is capped at $500, while the credit for windows is capped at $200.
It’s Not Too Late
Even if your time has run out for the 2011 tax credits, you’re not out of luck. There are still several incentives to go green in 2012. In fact, several tax credits are available through 2016; however, most incur a higher up-front cost and significant renovations to existing structures. In addition, these improvements can be made on both primary and secondary homes, but not on rental properties.
The following improvements qualify for a tax credit equal to 30 percent of cost, including installation, with no cap:
Solar Energy Systems: Both solar water heaters and solar panels, which are used to convert the sun’s energy into electricity, qualify. All ENERGY STAR water heaters qualify; however, the units must be used to heat water in the home, not to heat swimming pools or hot tubs.
Residential Wind Turbines: These small-scale wind turbines convert wind to electricity. In order to qualify, the turbine cannot exceed a nameplate of capacity of 100 kilowatts.
Geothermal Heat Pumps: These heat pumps use ground temperatures to provide heating, cooling and hot water needs to homes. They are recognized as the most efficient and comfortable heating and cooling technologies currently available.
Residential Fuel Cells: Fuel cells combine hydrogen and oxygen to form water vapor, heat, and electricity. The residential version qualifies for a tax credit equal to 30 percent of the cost up to $500 per .5 kilowatts of power capacity. In addition, microturbine systems qualify for the same tax credit, but are not yet considered a viable option for single-family dwellings.
While the above-mentioned tax credits are offered by the federal government, many states have also followed suit and created their own tax credits for similar upgrades. To see if you qualify for any of your state’s incentives, check out the Database of State Incentives for Renewables & Efficiency.
Although some of these credits expired at the end of last year, it’s possible that the federal government will extend any number of these programs. Besides, improving your energy efficiency will not only provide financial benefits in energy savings, it will also lessen the environmental impact of living in your home. And isn’t that the most important factor anyway?
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Brenda Ankney is an avid blogger who writes for a variety of publications, including Heating Oil Shopper, a leading provider of information on numerous home heating oil topics including heating oil prices in Massachusetts.