Tax Tip 2016: Tax Credits for Home Energy Efficiency
It's the last year to snag an energy tax break on new windows, solar and more.
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Your 2016 return is the last chance to claim a tax credit for installing energy-efficient windows or making similar energy-saving home improvements.
You can claim up to $500 in total tax credits for eligible improvements, based on 10% of the purchase cost (not installation) of certain insulation, windows, doors and skylights. The credit is subject to a lifetime cap, so if you’ve already pocketed the max, you’re out of luck.
But there’s no such limit on those who install qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines in 2016. Your credit can be 30% of the total cost (including labor) of such systems.
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Note that these tax credits are “nonrefundable,” meaning the credit can lower the amount of tax you owe to zero, but it can’t result in a refund. See IRS Form 5695 for more.
Check out all 23 commonly overlooked tax deductions.
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