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Will Energy Efficient Tax Credits Be Extended in 2011?

Introduction

For homeowners who wonder, “will energy efficient tax credits be extended in 2011?” the news is generally good. Energy efficient tax credits for energy efficient environmental regulation and electricity generation systems have been renewed without major revisions through December 31, 2016. Tax credits for other energy efficient home improvements have been extended as well, but only through December 31, 2011, and with significant newly imposed restrictions. All energy efficient home improvements must be “placed in service,” that is, completely installed and ready for use, by the stated deadline date to be eligible for tax credits. Products such as dishwashers, ceiling fans, electric furnaces and refrigerators are not eligible for energy efficiency tax credits. This article provides general information about federal tax credits for energy efficient home improvements. Please consult with an attorney, accountant or other tax professional to obtain specific advice concerning your particular situation.

Changes In the Energy Efficiency Tax Credit Program

The energy efficiency tax credit program for 2011 provides for a 10 percent credit for homeowners for the installation of several energy efficient additions to their existing primary residences. These regulations revert the limits for energy efficiency tax credits for home improvements to their 2006 and 2007 levels, according to the Energy Star website. Energy efficient home improvements affected by these changes include biomass stoves, heating, venting and air conditioning (HVAC), insulation; metal and asphalt roofs with reflective coatings, gas, oil, propane and electric water heaters, windows, doors and skylights.

Depending on the addition, credits for eligible improvements made during 2011 range from $50 to $300. The revised tax credit imposes a lifetime limit per household for the credit: for all eligible additions the credit is $500. If you received more than this amount for tax credits in prior years, you cannot collect additional credits, even for new additions or home improvements.The credits apply only to primary residences owned by the residents. Second homes, new construction and rental properties do not qualify under the revised tax credit guidelines.

Tax Credits for Energy Efficient Heating, Cooling and Electricity

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