Energy Tax Credits: Get Money to Improve Your Home's Energy-Efficiency

Learn how those eco-friendly home improvements can turn into tax deductions.


| March/April 2007



If your 2006 income taxes are grim, look on the bright side: You’ve still got several months to go green and save some in 2007. The Energy Policy Act of 2005 gives you until December 31, 2007, to improve your home’s energy efficiency and get a break on your federal income taxes. You have until 2010 to buy an alternative-fuel car and qualify for federal financial incentives.
Home improvement products must meet strict guidelines. Only your primary residence qualifies, and some products are subject to a total maximum credit of $500. For specifics, go to www.EnergyStar.gov and search for “tax credits.” In addition, check with your utilities provider; some states offer additional tax credits and deductions, rebates, freebies or other incentives on energy-efficient home improvements and products such as compact fluorescent light bulbs (CFLs).       

Windows

Tax Credit: 10 percent of cost, up to $200, for all windows, skylights and storm windows
Notes: Installation costs are not included. Energy Star windows qualify; subject to $500 Max

Doors (exterior or storm)

Tax Credit: 10 percent of cost, up to $500
Notes: Energy Star doors quality (except in parts of California); subject to $500 max

Insulation

Tax Credit: 10 percent of cost, up to $500

Central air conditioning, geothermal heat pump or air-source heat pump

Tax Credit: $300
Notes: Not all Energy Star products qualify; subject to $500 max

Furnace (gas, oil or propane) or hot water boiler

Tax Credit: $150
Notes: Not all Energy Star products qualify; subject to $500 max





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