Get Credit for Making Your Home Energy-Efficient

Although the credit for making energy-efficient improvements to your home have been substantially reduced, there is still time for you to take advantage of this tax break which expires after 2011 without Congressional action.

The credit for 2011 has been reduced to 10% of the cost (was 30%) with an overall cap of $500 (was $1,500) for making certain specified energy-efficient home improvements.  If the credit was claimed in 2006 or 2007, the credit caps are reduced by the amount claimed in those years.

To qualify for this credit, the energy improvements must be made to the taxpayer’s principal residence located in the United States.  Generally, the credit is the cost (up to certain limits) for qualifying improvements meeting specific energy-efficient standards certified by the manufacturer.

Qualifying improvements include heat pumps, boilers, water heaters and attic circulation fans, qualifying insulation, exterior windows including skylights and exterior doors.

However, the combined maximum credit for 2006, 2007 and 2011 is limited to $500, of which no more than $200 can be for window components, $50 for an advanced main air circulating fan, $150 for a qualified furnace or hot water boiler, or $300 for any qualified central air conditioner, heat pump, or water heater.  Installation expenses do not count as part of the cost for determining the credit.

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