Tax Credits for Energy Efficiency 2011


Save 10% – up to $500 – on your taxes by insulating your home from now until Dec 31, 2011!

Recently, Congress updated the existing federal tax credits for energy efficiency for installing insulation (e.g., spray foam insulation) in an existing home to 10% total cost of insulation (up to $500) for 2011. This means, you can potentially save as much as $500, simply by following these guidelines!

Insulation Tax Credits:

  • Have insulation “placed in service” (ready and available for use) between Jan 1, 2011 and Dec 31, 2011
    • For insulation to qualify for the 2011 tax credits for energy efficiency, its primary purpose must be to insulate (e.g., insulated siding does not qualify)
    • Must be expected to last 5 years OR have a 2 year warranty
    • Check to see if you have Home Performance with ENERGY STAR in your areas (adding insulation to your home is covered)
  • Insulation must be for taxpayer's principal residence (existing, not new home)
  • $500 is the maximum total amount that can be claimed for the tax credits for energy efficiency on all products placed in service in 2011
  • Installed insulation must have a Manufacturer Certification Statement (MCS) to qualify; and for record keeping, save your receipts
    • MCS defined as: signed statement from the manufacturer certifying the product qualifies for tax credit; taxpayers must keep a copy for their records, but do not have to submit a copy with their tax return
    • Links to MCSs: Touch 'N Seal
  • Improvements made in 2011 will be claimed on your 2011 taxes (filed by Apr 15, 2012) – use IRS Tax Form 5695 (2011 version) – it will be available late 2011 or early 2012 (2008 version available as reference only)

The best part is when you insulate your home, you will continuously save cooling and heating energy – thus saving even more money – for years to come!

Solar Energy Tax Credits:

The tax incentive already in place for solar energy systems is open to homeowners that meet the following requirements:

  • The photovoltaic system must be installed in your main residence (solar energy tax credits not available for second homes and rentals)
  • The system must generate at least half of its energy from the sun.
  • The qualifying property must be certified by the state government where it is installed or by the Solar Rating and Certification Corporation
  • The system should provide the residence with electricity
  • System must meet applicable electrical and fire code requirements

The solar energy tax credits are available for 30% of the cost of the system, up to $500 per .5kW of power capacity. Installation costs are included. Tax credits for solar energy expire December 31, 2016.

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