Energy-Related Improvements Earn Tax Credits

Have you recently installed energy efficient windows or doors? New energy efficient roof? How about a furnace or air conditioner with a high energy efficiency rating? These types of upgrades to your primary residence may qualify for a tax credit of up to $500. (A tax credit is a dollar for dollar reduction on your tax and is more valuable than a deduction.)

Of course your tax advisor can consult with you on the IRS regulations for this credit. But, in the meantime, go to www.energystar.gov or www.energy.gov/taxbreaks.htm and find out the details. The deadline is December 31, 2007 for most of these credits, so you may want to install those new windows this year instead of next…

Product Category Product Type Tax Credit Specification Tax Credit
Windows
Exterior Windows Meet 2000 IECC & Amendments 10% of cost not to exceed $200 total
Skylights Meet 2000 IECC & Amendments 10% of cost not to exceed $200 total
Exterior Doors Meet 2000 IECC & Amendments 10% of cost not to exceed $500 total
Roofing
Metal Roofs Energy Star qualified 10% of cost not to exceed $500 total
Insulation
Insulation Meet 2000 IECC & Amendments 10% of cost not to exceed $500 total
HVAC
Central AC EER 12.5/SEER 15 split Systems EER 12/SEER 14 package systems $300
Air source heat pumps HSPF 9 EER 13 SEER 15 $300
Geothermal heat pump ER 14.1 COP 3.3 closed loop/ER 16.2 COP 3.6 open loop/ER 15 COP 3.5 direct expansion $300
Gas, oil, propane water heater Energy Factor 0.80 $300
Electric heat pump water heater Energy Factor 2.0 $300
Gas, oil, propane furnace or hot water boiler AFUE 95 $150
Advanced main air circulating fan No more than 2% of furnace total energy use $50

* Source: ENERGYSTAR.gov