2011 Tax Credit for Qualified Energy Efficient Improvements

Have the tax credits been extended for 2011?
On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This law extends the tax credits for energy efficiency into 2011, BUT at lower levels. The levels revert back to those in effect in 2006 and 2007, which were 10% of the cost of the improvement, up to $500, with a $200 max for windows, and several other set maximums.

Highlights:

• $500 lifetime limit. If you got over $500 in these tax credits from 2006 – 2010, you are not eligible for anything more.
• 10% up to $500 for insulation, roofs, and doors.
• Windows capped at $200, but qualification now ENERGY STAR
• Furnace and boilers capped at $150, and all furnaces and boilers must meet 95 AFUE
• $50 for advanced main air circulating fan
• $300 for air conditioners, air source heat pumps, water heaters, and biomass stoves

How to apply for the tax credit? What tax form you need for the energy efficiency tax credits?

2010
For products “placed in service”* in 2010, you need to file the 2010 and submit it with your 2010 taxes (by April 18, 2011).
On the the residential energy tax credit (from Form 5695) is claimed on line 52.

2011
For products “placed in service” in 2011, you need to file the 2011 IRS Form 5695 and submit it with your 2011 taxes (by April 15, 2012).
On the 1040 form the residential energy tax credit (from Form 5695) is claimed on line 52.

What you need to submit and save:

• Save your receipts and the Manufacturer’s Certification Statement** for your records.
• Submit Form 5695 with your taxes.

*What does “placed in service” mean?
The IRS defines “placed in service” as when the property is ready and available for use. It’s not when you purchase product, but the day installation is complete, and you are able to use your new product.

**What is a Manufacturer’s Certification Statement?
A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Manufacturers should provide these Certifications on their website. Call the manufacturer, or search their website. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.

Source: U.S. Environmental Protection Agency. U.S. Department of Energy.

DISCLAIMER: Builder-Max, Inc. bears no responsibility in validating or obtaining the tax credit and expressly disclaims any responsibility for determining whether a particular purchase or application qualifies for the tax credit. Further, Builder-Max, Inc. does not intend to and is not providing legal or tax advice and recommends that purchasers consult their own tax advisor or the IRS to determine whether the products they purchase for a particular application qualify for the tax credit.