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Money & Policy

How to Get Tax Breaks to Save on Home Energy Costs

Where to find info to go green while getting some green


(This article previously appeared on MoneyTips.com.)

You want to be an energy saver, and are interested in going green as much as possible through new energy-efficient appliances, home modifications and perhaps even building a brand new energy-efficient home. Every level of the U.S. government also wants you to be an energy saver, and is willing to back it up with programs and tax incentives that encourage energy-saving efforts and can deliver you home energy tax breaks for 2015, 2016 and beyond.

Tax Incentives for Energy Efficiency

Thanks to these government tax incentives, you can now go green while getting some green. These credits can save you thousands of dollars. How do you find these tax-saving programs?

The Internal Revenue Service has information for federal tax incentives, included the latest extensions to claiming energy incentives from the American Recovery and Reinvestment Act.

The Energy Star website has a rebate finder that allows you to locate rebates for energy-efficient appliances and heating/cooling systems.

Also, several clearinghouse websites that can help you find the programs that are most relevant to your needs and help you claim those home energy tax breaks:

Energy.gov has a handy search menu that allows you to filter through current programs using eligibility criteria or by more narrow savings categories such as heat pumps and air conditioners. A further filter allows you to narrow your search by state or keyword. For more details, click on any of the programs meeting your search criteria. The site will connect you to a detailed summary of the program, its history and amendments/changes, eligibility and availability requirements, and links to supplementary information.

The online Database of State Incentives for Renewables and Efficiency (DSIRE) contains a state map with links showing all of the available programs in any selected state. Applicable federal tax incentives such as the Residential Energy Efficiency Tax Credit are included in every state’s list. As with Energy.gov, you can narrow down the possibilities using filters. Clicking on any individual program name leads to a comprehensive project summary.

The Energy Star website has a rebate finder that allows you to locate rebates for energy-efficient appliances and heating/cooling systems by ZIP code. Energystar.gov also contains a product finder for products that meet Energy Star standards plus ideas for building energy-saving homes and making existing ones more energy efficient.

Don’t forget to consult your local government (county, city, or planning entities) for other programs that target green efforts. Ask for advice whenever you shop around for contractors, since they often have knowledge of local programs that may apply to your situation and how to handle the corresponding paperwork.

It is important to read the details on any published tax incentive to verify that the information is still valid, especially for federal programs. Energy-efficiency tax initiatives are constantly changing and often allowed to expire, and then get retroactively reinstated by Congress.

The recent budget bill retroactively restored some tax benefits to 2015 purchases, so even if you have already completed your green project, tax savings may still be available. Check the DSIRE and Energy.gov websites and with the IRS to see if any credits are available.

For 2016, if you are considering new appliances or home improvement projects, look over your options for tax incentive programs. It is a win-win situation for both you and the environment.

By MoneyTips.com
MoneyTips.com is a vibrant web portal where tens of thousands of consumers enjoy free access to exclusive financial content. Consumers can find local financial advisors, mortgage brokers and insurance agents, get free, personalized answers to their questions from financial professionals within 24 hours, and access a vast library of original articles and videos to make the most of their money.@MoneyTipsSocial
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