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Federal Energy Saving Tax Credit

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    Home Energy

    • The purchase and installation of energy-efficient products, such as windows, insulation, doors, heating and cooling equipment and roofs, qualify homeowners for a tax credit. The credit is good for 30 percent of the total cost of the product, up to $1,500, for purchases made and installed between January 1, 2009 and December 31, 2010. The energy-efficiency tax credit can be claimed on the 2010 income tax return.

    Home Heating

    • Consumers who choose to purchase and install a home heating system that uses an alternative fuel as a source of heat also qualify for the energy efficiency tax credit. Heating systems that qualify for the tax credit include those that are fueled by biomass. Biomass fuels include wood, wood waste, wood pellets and agriculture crops such as corn, plants, fibers and grasses. The biomass-burning heat source must be installed and used in the primary residence of the taxpayer, must be used to provide heat for the home or to heat water and must have an efficiency rating of at least 75 percent. The tax credit is 30 percent of the total cost of the biomass burner and installation, up to $1,500.

    Hybrid Vehicles

    • Tax credits also are extended to consumers who purchase, or put into use, a qualifying hybrid vehicle after January 1, 2006. This tax credit is not extended to taxpayers who lease a vehicle, because the leasing company has the right to claim the credit since they retain ownership of the vehicle. To qualify, the vehicle owner must have purchased the vehicle between December 31, 2005 and December 31, 2010, it must be used primarily in the United States and the credit is only valid for purchasers of a new vehicle. If the vehicle is purchased by a tax-exempt organization, the person the car was purchased from may claim the credit, but the seller must inform the tax-exempt organization of the amount of the credit.

    Windows, Doors and Skylights

    • Homeowners who replaced windows, doors and skylights with energy-efficient models between June 1, 2009 and December 31, 2010 qualify for energy saving tax credits as well. The products---windows, doors or skylights---must have a U-factor and Solar Heat Gain Coefficient of less than or equal to 0.30. In addition, most homeowners also receive credit for Energy Star-qualified windows doors and skylights purchased and installed between January 1 and May 31, 2009. Replacement of all windows, doors or skylights is not necessary to qualify for the credit and it does not have to be a replacement; homeowners who choose to install a new window, door or skylight qualify as well. The tax credit is 30 percent of the total cost of purchase and installation, with no upper limit on the credit.

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