There are two federal energy tax credits, and it is important to know the difference before you apply. One is for general energy efficiency measures such as adding insulation or replacing an outdated furnace. The other is for renewable energy installations such as solar panels and geothermal heat pumps.
Energy Efficiency Credit
The energy efficiency tax credit will cover efficient windows, insulation, furnaces, boilers, air conditioners and more. The credit is equal to 30 percent up to $1,500 of the total material costs, and in some cases, the labor costs as well for all of the installed equipment. These measures must be made on primary U.S. homes. Renters are not eligible for the credit.
Renewable Energy Credit
The renewable energy credit is equal to 30 percent of the installation costs for solar photovoltaic, solar thermal, geothermal heat pumps, wind and more. There is no upper limit for this credit, and if what you owe is less than your credit, you can carry the remaining credit forward to future tax years. Qualifying renewable energy equipment will be eligible if installed in primary or secondary U.S. homes.
Instructions on how to claim the credits can be found by follow the above links.
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