Are you interested in getting a $500 tax credit this season? How about $1,000+? Today, we’re going to tell you how you might be eligible to do just that!
This credit is for people who have installed Energy-Star-certified products in the 2019 tax year. If you’re saying, “Oh man, I installed my new efficient furnace back in 2017!” … you are still eligible for the credit if you are willing to go back and file an amended tax return for that year. (We recommend consulting a tax preparer if you plan on doing this!)
The tax credit is also for people who installed any renewable energy products last year. (With the same note about filing an amended return for installations done prior to 2019.)
So now, you’re probably wondering: “What products are eligible, and how much money am I getting off my tax return?”
These are both great questions!
For Renewable Energy Improvements:
– geothermal heat pumps
– wind turbines
– solar energy
– fuel cells
(We have installed and replaced plenty of water heater geothermal systems!)
The tax benefits for these improvements are quite significant. The tax credit is a percentage of the overall cost of the system. It also depends on when the system was installed. For systems installed in 2020, you get a credit equal to 26% of the system’s cost. For systems installed in 2021, you get a credit equal to 22% of the system’s cost. And unfortunately, if you install a system in 2022 or beyond, there are currently no tax credits in place, but they could always be renewed!
In fact, the renewal of the tax credit policy is exactly what happened with Energy-Star-certified systems.
For Energy-Star-Certified Home Improvements:
Back in 2018, people thought that it would be the last tax year to install these improvements and still get a tax credit. But in 2019, they announced that the credits have been extended through December 31st, 2020!
That gives us hope that these credits might keep being renewed in the coming years!
So, what qualifies for this credit?
Any Energy Star home improvement, like an A/C system or furnace, a water heater, insulation, roofs, or windows. Unfortunately, buying an Energy Star appliance like a refrigerator doesn’t count!
The full list of qualifying improvements and how much you’ll be credited can be found at this official link.
For example, if you installed a new and efficient air conditioner last year, your tax credit amount is $300, and if you installed an efficient gas furnace last year, you get a $150 credit.
For insulation and roofs, the credit is more significant, with insulation (bulk insulation or other weather-stripping solutions both being qualifying purchases) and metal / asphalt roofing netting you a credit of 10% of the cost. (There is a $500 limit.)
It’s true that the tax credits for renewable energy improvements are a bit more significant than the tax credits for the Energy Star products, but it’s so simple to get the credits! We’re glad we could share this opportunity with you.