Tax guide

Residential Energy Credits

Making energy-efficient upgrades to your home is a great way to save money on utilities, but it can also give you a break on your taxes.

Energy-Efficient Home Improvements

The Residential Energy Credits are technically two credits, the Residential Energy Efficient Credit and the Nonbusiness Energy Property Credit.

The Residential Energy Efficient Credit is for 30% back on your costs for certain equipment that uses alternative energy, such as:

  • Solar panels
  • Solar water heaters
  • Wind turbines
  • Geothermal heat pumps
  • Fuel cells
  • Woodstoves
  • Natural gas, propane or oil furnaces and hot water boilers

There is no dollar limit for the credit, except for fuel cells, where there is a $500 limit for each half-kilowatt capacity.

The Nonbusiness Energy Property Credit is for up to 10% back on certain energy-efficient home improvements, including windows, doors and skylights, insulation, roofing, heat pumps and central air conditioners. This credit had expired at the end of 2017, but has been renewed.

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Claiming the Credits

For claiming the Residential Energy Efficient Credits, the home must be in the U.S., but it doesn’t have to be your main home. Fill out our Form 5695 screen in your tax return.

Also see:
Keeping Records for Home Tax Breaks
Tax Breaks for Vacation Homes

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