Energy Tax Credits for Home Improvements
Get ready for the 2016 tax season by knowing what home improvements you can make to qualify for energy tax credits. Home improvements are more affordable and beneficial for you if you go with ones that fall under the Non-business energy property credit and the residential energy efficient property credit. So, let’s jump in and get started.
With this credit, homeowners are able to claim 10% of the price of the eligible home improvements (excludes labor/installation fees).
- Qualified energy efficiency improvements – Insulation, exterior windows, storm windows/doors, metal and certain asphalt roofs
- Residential energy property expenditures – electric heat pumps, central air conditioning, natural gas/propane/hot water boilers, natural gas/propane/oil furnaces, advanced main air circulating fan used in natural gas/propane/oil furnaces, and biomass fuel stoves.
The nonbusiness energy property credit has a lifetime limit of $500 after 2005 and is broken down below.
- $200 on windows
- $50 on advanced main air circulating fan
- $150 on qualified natural gas, propane, or hot water boiler
- $300 on energy efficient building property
Residential Energy Efficient Property Credit
Homeowners are able to claim 30% of the cost of alternative energy equipment installed in or on their homes for the following things:
- Solar electric property
- Solar water heating property
- Fuel cell property
- Small wind energy property
- Geothermal heat property
This credit has no dollar limit for many property types. If the credit exceeds the amount that you owe in taxes, you can claim the unused portion the following year during tax season. However, this excludes the fuel cell property, which has a $500 cap for each one-half kilowatt of capacity of the property.