Residential Energy Property Credit

The federal tax credit for energy-efficient home improvements was established by the Energy Policy Act of 2005. Expiring December 31, 2007, the credit was extended and expanded by The Energy Improvement and Extension Act of 2008 (H.R. 1424: Div. B, Sec. 302) and The American Recovery and Reinvestment Act of 2009 (H.R. 1: Div. B, Sec. 1121). The credit now applies to eligible equipment purchased between January 1, 2009, and December 31, 2010. The credit applies to energy efficiency improvements in the building envelope of existing homes and for the purchase of high-efficiency heating, cooling and water-heating equipment. Efficiency improvements or equipment must serve a dwelling in the United States that is owned and used by the taxpayer as a primary residence. The maximum amount of homeowner credit for all improvements combined is USD1,500 for equipment purchased during the two-year period of 2009 and 2010 and the tax credit is worth up to 30% of the cost of upgrades. Eligible improvements include: building envelope improvements (windows, insulation, doors, roofs), heating, cooling, and water-heating equipment (such as air conditioners, fans).

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