Federal Tax Credits
To receive credit on your federal income tax return, file an Energy Star tax credit form 5695, which is available on the Internal Revenue Service (IRS) website. The form includes directions and rules about what qualifies. Be sure to save your purchase receipts and the Manufacturer Certification Statement with your tax records.
There are three basic groups of tax credits. The first is for existing homes which are primary residences (new construction and rentals do not qualify) where the new products are installed before the end of 2010. In this category people can receive a credit of 30 percent of the cost of energy efficient appliances, up to $1,500 for qualified: Biomass stoves, Heating, Ventilating, Air Conditioning (HVAC) systems, Insulation, Roofs (Metal and Asphalt), Water Heaters (Non-solar), and Windows and Doors (Exterior).
The second group is for major systems in primary residences or second homes (rentals do not qualify) where the new products are put into use before the end of 2016. Also a credit of 30 percent of the cost, this group has no limit. The following types of products qualify: Geothermal heat pumps, Small wind turbines (residential), and Solar energy systems.
The last program only addresses fuel cells (residential fuel cell and microturbine systems) put into service before the end of 2016. Existing homes and new construction which are primary residences qualify (rentals and second homes do not qualify). The fuel cell tax credit is 30 percent of cost, up to $500 per .5 kW of the system’s power capacity.