Home Energy-Efficiency Improvement Tax Credit for 2006-2007

Visit the Energystar.gov for more information

"You can get a one-time tax credit up to $500 for installing efficient siding, new windows, insulation, doors, roofs, and heating and cooling equipment in your home."

What energy-efficient home improvements are eligible?

The overall $500 cap can be reached in several ways with the purchase and installation of energy-efficient products:

• Exterior windows (including skylights) 10 percent of the total cost, up to $200.
• Insulation, exterior doors, or pigmented metal roofs: 10 percent of the total cost, up to $500. Duct sealing and weather stripping or foam sealants may also qualify for the credit, depending on the IRS rules.
• Central air conditioner, heat pump, or water heater: up to $300 towards the full purchase price.
• Furnace or boiler: Up to $150 towards the full purchase price, and/or $50 for a furnace with an efficient air circulating fan.

To be eligible for the federal tax credits:

• Windows, doors, and insulation must meet the requirements of the International Energy Conservation Code, a model energy code for buildings. ENERGY STAR windows will almost always qualify.
• Metal roofs must have pigmented coatings that meet ENERGY STAR requirements.
• Heating and cooling equipment must meet stringent efficiency requirements - not all ENERGY STAR products will qualify.

"All the improvements must be installed in or on the taxpayer's principal residence in the United States."

When are they available?

The home improvement tax credits apply for improvements "placed in service" from January 1, 2006, through December 31, 2007. They are not available for improvements done in 2005. The IRS defines "placed in service" as when the products or materials are ready and available for use - this would generally refer to the installation, not the purchase.