Can you still get a tax break for making energy-efficient home improvements in 2011?
If you didn’t get around to making energy-efficient home improvements last year, don’t worry -- it’s not too late to get a tax break. But the tax credit in effect for 2011 projects is a lot less attractive than the one that applied to 2009 and 2010.
In 2009 and 2010, you could claim a tax credit worth 30% of the cost of qualifying energy-efficient home improvements, up to a maximum credit of $1,500 for those two years combined. In 2011, the credit is much smaller -- $500 -- and it is off-limits if you already claimed the credit for energy-efficient home improvements in the past. (A tax credit, which reduces your tax bill -- or increases your tax refund -- dollar for dollar, is more valuable than a tax deduction, which merely reduces that amount of income that is taxed).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The 2011 home energy tax credit is now limited to 10% of the purchase price of energy-efficient windows, doors and skylights, up to a maximum credit of $500, and only $200 of that amount can be allocated to the cost of replacement windows. Certain home improvements have specific dollar limits for the credit such as $300 for eligible central air conditioning, $300 for an air source heat pump, $300 for an electric heat pump water heater, and $150 for eligible natural gas, propane or oil furnaces. Even if you install several improvements, the maximum credit you can claim is $500. And you won’t be able to claim it on your 2011 federal tax return if you already received $500 or more in credits for energy-efficient home improvements from 2006 through 2010.
Some of the rules for tax-credit eligibility have changed, too. To see which products qualify, see the Tax Credit page at EnergyStar.gov or EnergyTaxIncentives.org for details.
A more generous credit is still in effect for taxpayers who buy and install alternative energy equipment in their homes. Qualified equipment includes geothermal heat pumps, solar water heaters, solar panels, fuel cells and small wind-energy systems (as long as no part of these systems is used to heat a swimming pool or hot tub). That credit -- worth 30% of the cost and installation of such improvements -- has no maximum dollar amount, and you have until December 31, 2016, to place those items in service.
If you’re still preparing your 2010 taxes and you’re wondering whether you can claim the energy-efficient tax break for home improvements you made last year, see these two articles about the 2010 credits: Tax Credits for Going Green and Tax Breaks for Energy-Efficient Home Improvements.
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Trump’s Tax Cut Risks Your SNAP, Medicaid BenefitsTax Cuts The GOP budget blueprint could slash lifesaving programs for millions of U.S. households.
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax RefundsTax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
-
Which Generation Pays the Most Tax in the US?Tax Burden Polls show that most people feel like taxes are unfair. But which age group bears the brunt of the tax burden in the United States?
-
How the Trump Harvard IRS Tax Threat Could Impact YouTax Law Trump's latest higher education showdown raises fundamental questions that could reach beyond Harvard's nonprofit tax status.
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and DiscountsTax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.
-
Tax Time: Does Your Kid Influencer Owe Taxes?State Tax Some minors are making big money on social media. Here’s how to know if they need to file taxes.
-
Did Florida’s Chance at $1,000 in Property Tax Rebates Vanish?State Taxes The Florida Legislature bypassed Gov. Ron DeSantis’ wish to cut property taxes and instead voted to lower the state’s sales tax.
-
How Caregivers for Adults Can Save on Taxes in 2025Tax Breaks Caring for your parent or spouse can be stressful, but the IRS offers tax breaks for qualifying taxpayers. Here they are.
