You may be able to reduce your taxes if you made certain energy-efficient home improvements last year. Here are some key facts that you should know about home energy tax credits. There is one energy tax credit available for Tax Year 2014, which is called the Residential Energy Efficient Property Credit. The Nonbusiness Energy Property Credit expired on December 31, 2013. However, Congress extended this credit until December 31, 2014. Therefore, you can claim it on your 2014 Tax Return. In future tax years, you can always go back and refile your tax return if you find out that you should have claimed the energy credit for qualified expenses.
Energy Property Credit for Non- Business Uses
- This credit is worth 10 percent of the cost of certain property that you added to your main home to save energy last year. This includes items such as insulation, windows, doors and ceilings.
- You could also claim credit for the actual cost of a good. This may include items such as water heaters and heating and air conditioning. Each property type has a different limit for the money you can claim with the energy credit.
- This energy property credit has a lifetime limit of $ 500. You may only use this $ 200 limit for windows on a home
- The taxpayer’s main home must be located in the U.S. to qualify for the credit.
- Make sure you have written certification from the manufacturer that his product meets the requirements for this tax credit. Usually they publish on its website or included with the product package. You can trust the information provided by the manufacturer to claim the energy credit, but do not attach this information to your return. Keep with your tax records in case the IRS has an audit and investigates your deductions for the energy tax credit.
- This credit expired at the end of 2013. Taxpayers could till claim the credit on their 2013 tax return if they did not reach the lifetime limit in previous years.
Credit for Energy Efficiency of Residential Property
- This tax credit is 30 percent of the cost of alternative energy equipment installed in your home.
- Qualified equipment includes solar water heaters, solar electric equipment and wind turbines.
- There is no limit on the amount of credit available for most property types. If your credit is greater than the tax due, the excess can claim this credit on the tax return next year.
- The house must be in the U.S. This has to be your main home.
- This credit is available through tax 2016.
Use Form 5695 , Residential Energy Credits, to claim these credits. For more on this, see the form instructions. You can obtain Form 5695 on IRS.gov or by calling 1-800-TAX-FORM (800-829-3676).
Additional IRS Resources on Energy Credit
- Energy Star – Federal Tax Credits for Consumer Energy Efficiency
- IRS – Get Credit for Making Your Home Energy Efficient or Buying Energy-Efficient Products
- Form 5695, Residential Energy Credits
- Form 5695, Residential Energy Credits – Use this form to figure and take your residential energy credits.
- Federal Tax Credits for Consumer Energy Efficiency