PATH - A Public Private Partnership for Advancing Housing Technology

Yes, Tax Credits!

[IMAGE: Home]Who wants to save $500?

It's the Federal Energy Bill, and you can make it work for you if you remodel your home to improve energy efficiency in 2006 or 2007. You'll save on the cost of home improvement, and you'll get a sweet payback every month in the form of lower utility bills.

The Skinny
The tax break covers 10% of the installed cost (except where noted) up to a $500 limit for:

• Insulation and building envelope improvements meeting IECC specifications (installation not included)
• Windows meeting IECC specifications, up to $200 (installation not included)
• Central air conditioners or heat pumps meeting 2006 Consortium for Energy Efficiency specifications (expected to be 15 SEER and 13 EER), capped at $300
• Furnaces and boilers with an Annual Fuel Utilization Efficiency of 95 or better, capped at $150
• Water heaters with an Energy Factor of .80 or better, capped at $300
• Heat pump water heaters with an Energy Factor of 2.0 or better, capped at $300
• Ground source heat pumps meeting specified performance levels, capped at $300

The tax break will also refund 30% of the cost of an installed solar water heater or photovoltaic system, up to $2,000. Find out more from the Solar Energy Industry Association's Federal Tax Guide.

Energy Star on the tax credit.

See the section "Residential Energy Credits" beginning at the bottom of page one of this 2006 IRS form:
Department of the Treasury Internal Revenue Service Form 1040-ES (E) [.pdf, 103 KB]

IRS's guidance on the tax credit (Notice 2006-26) [.pdf, 27 KB]

Content updated on 8/7/2006

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