Energy Tax Credits: What You Should Know

Depending on the age of your home, deciding to make it more energy efficient can be a big undertaking. To help offset some of the costs (and reward you for making an environmentally-friendly decision), the federal government offers energy tax credits for the average homeowner.  While there was talk of phasing this provision out in 2016, the current administration voted not only to restore them in 2018, but also to make them retroactive to taxpayers in 2017!  So, if you recently renovated your home in an energy efficient way, or you’re planning to this year, here’s what you need to know.

 

About Insulation

 

Not only is this one of the easiest ways to lower your monthly utility bills, but also it qualifies you for a tax credit!  Whether you decide to go with the traditional fiberglass batt and roll or upgrade to the expanding foam spray, you could qualify for a tax credit of 10 percent of the cost (up to $500).  Even if you don’t fully replace your insulation, taking precautions against air leaks with new weather stripping, sealing spray foam (in specific areas), caulking, and/or house wrapping, you could receive the same benefit. Unfortunately, the 10 percent doesn’t include any installation costs—only the material itself.  Still, it’ll help you lower the cost of investing in your property.  While we can help you with implementing some of these changes, you’ll have to talk to an experienced tax professional about how to apply.

 

About Roofing

 

When you need a new roof, why not see if you can get help paying for it?  While this tax credit is a little more specific, it still offers you a wide range of options today.  In order to qualify, you have to choose an Energy Star certified metal or asphalt material that’s designed to reduce the amount of heat your home absorbs.  With the help of pigmenting coatings and/or cooling granules, the right roof can stay up to 100 degrees cooler—and keep that heat from filtering down into your house.  If you pick one within these parameters, you can qualify for a tax credit of up to 10 percent of the cost—up to $500.  Again, this doesn’t include installation, so be sure to talk to us about your options, as well as your accountant.

 

About Windows, Doors, & Skylights

 

While these design elements allow in plenty of natural light, they can also lead to heat gain if you’re not careful.  So, replacing these elements or even adding new ones during an addition or renovation can qualify you for this same tax credit program.  Just make sure they comply with the Energy Star certification and you could get another 10 percent credit on next year’s taxes.  This has the same exclusion for installation costs, as well as a $500 cap.  However, for windows that lowers to $200.  So, plan your home projects accordingly!

Thanks to the Bipartisan Budget Act of 2018, these credits are extended until 2021 and they apply each year!  For more information, see the IRS’s official statement on these tax credits here.  You can also talk to your accountant to find out how to maximize these benefits and then come to us to get your energy efficiency projects taken care of.  After all, our experienced team can handle a number of your exterior projects, so you can start saving on your energy costs now!

 

 

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