Energy Incentives


The Federal government provides a suite of energy tax credits for heating and cooling systems and related energy-efficiency improvements.

Here’s the basics on some of the recent programs being offered:
» Lifetime credit max of 10% of costs, up to $500 for all energy improvements combined.
» File IRS Form 5695 with your returns. This can be tricky, so it’s important to verify this information with your tax professional and stay in tune to updates.

Currently there is a $500 overall ceiling, some improvements have individual limits below $500:

Additional credits include:
» $50 for any advanced main air-circulating fan.
» $150 for any qualified natural gas, propane, or oil furnace or hot water boiler.
» $300 for any qualified item of energy-efficient building property, as specified by the IRS. In previous guidance, this category included certain approved electric and geothermal heat pumps, central air conditioning systems, and natural gas, propane, or oil water heaters.
Installation costs are generally covered.

Limits and deadlines:
» You can't claim more than a $500 credit for the year.
» Save manufacture certifications and receipts in case you need them for filing.
» You must have installed a relevant heating and cooling system by Dec. 31, 2013

The Energy Star site has posted new guidelines on what heating and cooling systems are covered. It’s your safest bet for information on which kinds of systems and individual products get you the credit. Don’t rely solely on contractors who may not know the details of the energy tax credit program or who promise their products will get the credit in order to make a sale.

See these important links and resources for the most up-to-date information:
http://www.energystar.gov/
http://energy.gov/savings