2011 Energy tax credits have been extended in the recent Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 but they are extended at a much lower level than the 2009/2010 energy efficiency tax credits. The levels revert back to the 2006-2007 period tax credits, which were 10% of the cost of the improvement, up to $500, with a $200 max for windows. Here are some highlights of the 2011 energy tax credits and the list of credits you can claim for 2011. Note: There is a $500 lifetime limit, so if you claimed $500 between 2006-2010, unfortunately you cannot claim anymore.
Highlights of 2011 Energy Tax Credits
- As I said, the first and foremost limit is the lifetime maximum amount you can qualify. If you for over $500 in energy tax credits from 2006-2010, you are not eligible for more
- Windows are capped at $200 credit and it has to be Energy Star.
- 10% up to $500 for roofs, doors and insulation.
- AC, water hears and stoves capped at $300.
- Furnace and boilers capped at $150.
- Installation covered for: Biomass stoves ,HVAC and Non-solar water heaters
- Installation not covered for: Insulation, Roofs, Windows, doors, and skylights
List of eligible 2011 Energy Tax Credits
- Tax Credit: 10% of cost up to $500 or a specific amount from $50 – $300
- Biomass Stoves with Thermal efficiency rating of at least 75%. Credit Amount : $300
- Natural gas, propane or oil furnace with AFUE ≥ 95. Limit : $150
- Gas, propane or oil hot water boiler with AFUE ≥ 95. Tax credit : $150 (includes installation costs)
- Insulation including bulk products such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place.
- Central Air Conditioning, seasonal energy efficient ratio greater than 16 (for split systems) or 14 (for package systems) and energy efficient ratio greater than 13 (for split systems) or 12 (for package systems). Don’t worry if you don’t know what these are, just ask your HVAC contractor. Make sure to let them know you are planning on taking the credit. Limit: $300.
- Advanced Main Air Circulating Fan, not using 2% of the furnace total energy. Limit $50.
- Air source heat pumps. Maximum amount : $300
- Energy efficient windows, doors and skylights. You do not need to replace all the windows and doors to qualify. Windows capped at $200, otherwise it is 10% of the cost up to $500.
- Metal and asphalt roofing
All the above tax credits expires December 31, 2011. And they must be installed in your existing & principal home. New construction and rentals do not qualify.
Tax Credit: 30% of cost with no upper limit
- Geothermal heat pumps (includes installation costs). Check out the energy star geothermal page for more information on the specification of the heat pumps that are eligible.
- Solar water heaters (including installation costs). More information : Energy Star Solar water heaters.
- Residential small wind turbines with a nameplate capacity of no more than 100 kilowatts.(including installation costs)
- Solar panels
These tax credits expires December 31, 2016. Rental do not qualify, but new constructions or existing home, principal residence or second home, they all will qualify for this credit.
Tax Credit: 30% of cost, up to $500 per .5 kW of power capacity
- Fuel cells with efficiency of at least 30% and must have a capacity of at least 0.5 kW. The tax credit include installation cost and expires December 31, 2016. Rentals and second homes do not qualify. Principal residences, new or existing qualifies.
All these tax credits are “non-refundable” tax credits so you can’t get more back in tax credits than you pay in federal income tax.
How to claim the 2011 Energy Tax credits
Do not install anything “just” to get the credit. If you are planning to change your system to make it more energy efficient anyway, these are great credits to lessen your expenses.
- From the above listed credits, consider what system you would like to replace and go to the Energy Star website to check exactly what model/basic minimum eligibility criteria you have to cover to get the credits.
- Save the receipts, all of them – system cost, installation and any manufacturer certifications.
- File IRS Form 5695 with the rest of your tax forms in 2012.
Plug-in Electric vehicle credit
All the above mentioned credits are mainly to make your home energy efficient. If you are not eligible for them or can’t do any modification to your home, you can still become green and get some tax credits via the plug-in electric vehicle credits.
- Plug-in Electric Drive Vehicle Credit : The minimum amount of the credit for qualified plug-in electric drive vehicles, which runs through 2014, is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The credit for each manufacturer phases out after they sell 200,000 vehicles.Some models that are eligible for this credit are : 2011 Nissan Leaf, 2011 Wheego LiFe and CODA sedan. For other models/make check the Fuel Economy website
- Plug-In Electric Vehicle Credit This is a special tax credit for two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. I always wanted a cute golf cart! The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. For eligible make/model, here is a list of Qualified Electric Vehicles from IRS. Some other vehicles might also qualify, just make sure they are certified by the manufacturer to be qualified for this credit.
- Credit for Conversion Kits This credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle that is placed in service after Feb. 17, 2009. The maximum credit, which runs through 2011, is $4,000.
Energy Star Appliance Rebate
I wrote about the cash for appliances program last year – Cash for appliances. This is separate from the energy tax credit, this is executed at the state and local utility company level. A lot of the states have depleted the funds alloted for this program (in some states, consumers can join a waitlist in the event that additional funding becomes available). Some of them are restricted to provide free appliances for low income families or people with disability. There are still a handful of states that have left over funds – the yellow states.
To find out more about the procedure for your state and get the exact rules, visit Energy Efficient Appliance rebate center @ Energy Savers.
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