When it comes to energy credits, you’ll need to remember the past as you look to the future. That’s because the federal tax credit for energy-efficient improvements made to your home is available for 2011 — but with the original standards instead of the more generous rules applicable to your 2010 tax return.
For your 2011 return, the maximum credit you can claim for installing energy-saving windows, doors, roofs, or other eligible improvements or property is $500. Be aware the “new” old rules make that figure cumulative, meaning the amount you claimed for the credit in prior years will reduce the amount you can claim this year.
In addition, the credit may be limited by the type of property or improvements. For instance, the maximum credit you can claim for windows is $200.
Improvements you make to the “envelope” of your home, such as roofs, insulation, and windows or doors, must be expected to last at least five years. Generally, only the cost of the improvement qualifies for the credit, so you wouldn’t count what you pay for installation.
For energy-efficient property, including heating and cooling systems and water heaters, you can add labor costs when figuring the total expense to which the credit applies.
All upgrades must meet specified energy requirements and some property may qualify for other credits. Please contact us if you need details.