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federal tax incentives

Federal Tax Credits for Existing Energy-Efficient Homes

Get a 10% tax credit up to $500 for home energy efficiency measures placed in service by December 31, 2013! 

On January 3, 2013, the American Taxpayer Relief Act of 2012 (H.R. 8) was passed. The tax benefits for energy measures were implemented immediately.  Details of those energy efficiency measures are identified in Title IV of The Act and as follows:

Sec. 401. Extension of credit for energy-efficient existing homes

This provides a 10% credit for the purchase of qualified energy efficiency improvements to existing homes. The energy-efficiency home products are retroactive for 2012 and must be “placed in service” before December 31st, 2013. The maximum credit for a taxpayer for all taxable years is $500, and no more than $200 of such credit may be attributable to expenditures on windows. This rule means that taxpayers, who have claimed $500 or more of this tax credit in prior years, particularly 2009 and 2010, are no longer eligible for the credit.

Eligible measures are: (10% tax credit, up to $500 is applicable unless otherwise noted)

  • Insulation: Added insulation to walls, ceilings, or other part of the building envelope that meets the 2009 IECC (& supplements) specifications.
  • Windows and Doors: Replacement windows and skylights, and exterior doors which meet ENERGYSTAR ® guidelines. The credit covers 10% of the material cost, up to $200.
  • Window Film: Window films certified by the manufacturer that the product meets the requirements of a “qualifying insulation system.”
  • Air and Duct Sealing: Sealing cracks in the building shell and ducts to reduce infiltration and heat loss – these should be sealed so as to be consistent with the 2009 IECC.
  • Roofs: Pigmented metal roofs, or an asphalt roof with cooling granules must meet Energy Star requirements.
  • Water Heaters: An electric heat pump water heater , which yields an energy factor of at least 2.0 in the standard Department of Energy test procedure. A natural gas, propane, or oil water heater , which has an energy factor of at least 0.82 or thermal efficiency of at least 90 percent.
  • Furnaces: Natural gas & propane furnaces must meet an Annual Fuel Use Efficiency (AFUE) 95 or higher, oil furnaces and gas, oil and propane boilers must meet an AFUE of 90 or better. The credit covers costs up to $150.
  • HVAC: Central air conditioning units and air-source heat pumps must meet the highest tier standards set by the Consortium for Energy Efficiency (CEE) as of February 17, 2009, which in most cases requires a Seasonal Energy Efficiency Ratio (SEER) of 16. SEER measures performance throughout the cooling season. The credit covers costs up to $300.
  • Biomass: A biomass fuel property, which is a stove that burns biomass fuel to heat a dwelling unit located in the United States and used as a principal residence by the taxpayer, or to heat water for such dwelling unit, and that has a thermal efficiency rating of at least 75 percent.

Additional Resources: 

Federal ENERGY STAR website

Miami Herald news article (good summary of the basic facts)

DSIRE website

Energy Efficiency Business Coalition website

Our press release