2019 Tax Energy Credits for Your Home

It’s tax season again and homeowners who made energy efficient upgrades to their homes in 2018 may be eligible for tax credits to offset the costs of installation. In this blog post, Santanna Energy goes through the tax credits homeowners can claim by filling out their Form 5695 with their return.

Energy Efficiency Home Credits

Home energy efficiency upgrades can mean a lot of savings on your electricity bill but installation can come with high costs. For the purposes of filing, a home is where you lived in 2018. This can include houseboats, apartments, condominiums, or mobile homes.

While Federal energy efficiency tax credits expired in 2016, many states still offer energy efficiency tax incentives through property or sales tax exemptions. Local utility companies also provide rebates for a range of energy efficient appliances, lighting, electronics, or heating and cooling equipment.

The amount of rebate homeowners can expect can vary on the energy efficiency equipment installed. Some rebates are also available only when the equipment is fully installed. Check to see which rebates are immediately available and which are available only after installation is complete. Energy.gov provides a list of tax credits and rebates by state to assist with the filing process

Tax Credits from Renewable Energy

According to the Internal Revenue Service, homeowners may be able to take credit for 30% of your qualified costs for solar, wind, and geothermal equipment installed in your main home and any other home you lived in during 2018.

  • Solar Energy
    Solar panels or other solar electric equipment used to generate electricity in your home are available for credit. Solar hot water systems are qualified for credit if at least half of the energy used to heat your home is derived from solar power. Congress had extended this credit at the end of 2015 so homeowners have until the end of 2019 to claim the credit. 
  • Wind Energy
    Homes that uses electricity generated by wind turbines are available for credit.
  • Geothermal Heat Pump
    Any geothermal equipment that uses ground or ground water to cool or heat your home is available for credit. Additionally, qualified geothermal pumps must meet the requirements of the Energy Star program that are in effect at the time of purchase.

Nonbusiness Energy Property Tax Credit

For the Nonbusiness Energy Property Tax, the IRS distinguishes between “qualified energy efficiency improvements” and “residential energy property costs.”

The list of Qualified energy efficiency improvements include:

  • Some roofing materials
  • Exterior windows and skylights
  • Home insulation
  • Exterior doors

Residential energy property costs includes:

  • Natural gas, propane or oil furnaces
  • Natural gas, propane or oil hot water boilers
  • Natural gas, propane or oil water heaters
  • Electric heat pumps
  • Electric heat pump water heaters
  • Central air conditioning systems
  • Advanced circulating fans for natural gas, propane or oil furnaces
  • Stoves that use biomass fuel

For filing purposes, you can claim 10% of the cost of your qualified energy efficiency improvements and 100% of residential energy property costs. You should be aware, however, of the following limitations:

  • This tax credit is worth a maximum of $500 from the year 2006 to present combined.
  • Of the $500 maximum, $200 is the maximum for window improvements.
  • $50 dollars is the maximum tax credit for furnace circulating fan.
  • $150 is the maximum credit for a furnace or boiler.
  • The maximum credit for any other single residential energy property cost is $300.

Installing efficient energy improvements in your home can be cost effective in the long term. However, at the time of installation, it can take quite a toll on your wallet. Take advantage of these tax credits when you file to recoup some of your installation costs.

If you’re interested in cost-effective options, Santanna Energy offers a rewards program for its customers with monthly rewards that can be used on shopping, dining, travel, entertainment and more!