Home Energy Efficiency Improvement Tax Credit

Why is it important now?

The stimulus law provides significant tax incentives

The tax credits provided by the stimulus law make it more affordable than ever to improve the energy efficiency of your home. In fact, 2009 may be your best year ever to consider making certain home improvements. To read about these and other tax incentives in ARRA, click here and go to page 192.

You can increase the value of your home

Upgrading the energy efficiency of your home may increase your home's value and lower your heating and cooling costs. The Non-Business Energy Property Tax Credit is intended to motivate improved weatherization and reduced energy usage for existing homes. The Residential Energy Efficient Property Tax Credit is designed to motivate the installation of larger-scale solar, geothermal, and wind energy systems in new home construction and existing home.

Qualified upgrades must meet certain energy efficiency standards

In order to claim the benefits of either of the energy efficiency tax credits, the upgrades must meet certain standards set by the federal government. The stimulus law increases the energy efficiency standards for certain upgrades that are purchased on or after February 17, 2009. Before purchasing any new fixtures or improvements, make sure that they meet all of the requirements for the ARRA tax credits. Retain the sales receipt, an itemized receipt from your contractor, and the manufacturer's energy efficiency certification, which may be provided on the packaging or the company's Web site.

Certain renewable energy upgrades may help you save even more

The Residential Energy Efficient Property Tax Credit is also 30%, but there is no maximum dollar limit. Qualified renewable energy improvements can be made to new or existing residences. Eligible improvements include certain solar panels, solar water heaters, small wind energy systems, or geothermal heat pumps. This tax credit is available for eligible improvements made between January 1, 2009 and December 31, 2016.

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True Cost Auto

Hybrid Vehicle Tax Credit

To learn about the federal tax credit for energy-efficient cars, click here.


The information contained herein is drawn from sources that are believed to be reliable, but it cannot be guaranteed as to completeness or accuracy. The content is not intended to be, and should not be relied upon as, tax, legal, or financial planning advice. Consult your tax advisor for specific advice.

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