We put together a big list of home improvement tax credits to help you save money on your 2016 tax return. We also included information on rebates for energy-efficient appliances to help you save money if you need/want to use your tax savings on energy-efficient appliances.
To help provide incentives for homeowners to make energy-efficiency home improvements, the federal government offers tax credits as a way to offset the costs of these repairs/changes. This is not cash in your hand (like a rebate which gives you cash back after you’ve made a purchase), but rather a deduction you can make on your annual tax return that can, depending on your other deductions, reduce the federal taxes you pay as a homeowner.
Please Note: Tax credits for home improvements might change. In other words, a tax credit that exists today for, say, replacing your attic insulation, might not exist next year or, if it does exist, might not be for the same dollar amount. Check Energy.gov to see what tax credits can be claimed in your state: http://energy.gov/savings.
It is recommended that you consult your tax advisor about your individual tax situation. This guide is meant to provide general information only.
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Is there a tax credit for roofs? Yes! If you are replacing or adding a new roof to your home, you could qualify for an energy-efficient home improvement tax credit for as much as 10 percent of the cost (not counting installation costs). Here’s how to add your roof tax deduction to your tax return and the requirements to receive a roof tax credit.
You can deduct up to 10 percent of the cost (not including installation costs), up to $500.
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Solar panels collect light energy from the sun and convert it into electricity for your home and solar hot water heaters use the sun to provide hot water to your home. Here’s what you need to know to find out if you can qualify for home energy improvement tax credits for installing solar panels or solar hot water heaters. Find out more about how solar energy works on our blog.
You can deduct up to 10 percent of the cost (not including installation costs), up to $500.
Other common questions about solar panel tax credits:
No, solar energy products are not currently eligible to earn the ENERGY STAR label, because they do not yet meet the criteria in the ENERGY STAR guiding principles. As solar panels increase in popularity that could change.
You could be eligible for an energy-efficient home improvement tax credit on as much as 30 percent of the cost, including installation, with no upper limit.
Other common questions about solar hot water heater tax credits:
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Replacing old windows, doors and skylights is one way to save on energy costs. Energy-efficient windows, doors and skylights can prevent heat loss in cooler weather and help maintain the cool temperature you want during the warmer months.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
Other common questions about windows, doors and/or skylights tax credits:
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If you want to learn more about insulating your home, check out our Home Energy Savings series on attic insulation. Products that reduce air leaks can also qualify if they follow certain criteria.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
10 percent of the cost (not including installation), up to $500
Other common questions about insulation tax credits:
Products that reduce air leaks can also qualify, as long as they come with a Manufacturer’s Certification Statement. These include:
Yes, you can install the products yourself and still qualify for the credit.
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Biomass stoves burn plant-derived fuel, such as wood and wood waste like wood pellets as well as grasses.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
You can receive a $300 energy efficient home improvement tax credit for purchasing a biomass stove.
Other common questions about biomass stove tax credits:
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Replacing antiquated central or air conditioners or adding central air conditioners could qualify you for a federal tax credit. Find out more here.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
You can be eligible for a $300 home improvement tax credit if you replace or install central air conditioning.
Other common questions about central air conditioner tax credits:
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Unlike their solar counterparts, non-solar water heaters operate on gas, propane or electricity. Here’s what you need to know to see if your water heater qualifies for a federal tax credit.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
Other common questions about non-solar water heater tax credits:
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Geothermal heat pumps are similar to ordinary heat pumps, except for this one major difference: they use the ground instead of outside air to provide heating, air conditioning and, in most cases, hot water. They use the Earth’s natural heat, making them among the most efficient and comfortable heating and cooling technologies currently available.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
Installing a geothermal heat pump in your home could entitle you to a federal tax credit of up to 30 percent of the cost, including installation, with no upper limit.
Other common questions about geothermal heat pump tax credits:
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Wind turbines essentially collect kinetic energy from the wind and then convert it into electricity.
When you submit your 2016 tax return, file Form 5695 (Residential Energy Credits) here.
You can qualify for 30 percent of the cost (including installation).
Other common questions about small wind turbines tax credits:
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Like federal tax credits, rebates are incentives for consumers — this time from manufacturers and/or power companies rather than the federal government — to help give them incentives to upgrade antiquated and likely less energy efficient appliances with newer models that operate more efficiently. Unlike tax credits, rebates are actual cash — eventually. Yes, some paperwork is required. You generally need to show proof of purchase and model numbers (depending on the type of rebate), but then if all matches up, a check will be mailed to your home from either the participating manufacturer or energy company. Fairly simple, right? And likely worth the effort.
While the list changes regularly as manufacturers and power companies offer different options, generally the following appliances qualify for rebates on a fairly regular basis:
Appliance rebates:
Fan rebates:
Heating and cooling equipment rebates:
Home exterior/interior rebates:
Residential water heater rebates:
While there are a multitude of ways you can discover rebates, the easiest way is to visit ENERGY STAR®’s rebate center and type in your ZIP code. This government agency keeps track of rebates for energy-efficient appliances from a variety of resources, making it your one-stop appliance rebate shop. Typing in 06019, for instance, yielded 23 rebate opportunities, ranging from a $750 rebate for replacing a boiler to $250 for an air-source heat pump from Eversource, a utility in Connecticut. The rebates change regularly so it’s worth checking the site regularly to see if something has cropped up for an appliance you’re in the market to replace.
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It’s worth noting that in some instances an energy-efficient appliance might qualify for both a rebate and a tax credit. Now that could be a win-win for you and the environment!
We hope this has helped you figure out how to finance some of your home energy improvements. Is there a rebate or tax credit you’ve found? Share in the comments and help us all keep track!
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I BOUHGT A HOME AND REPLACED ALL THE DOOR AND WINDOWS COST OF $21,000.IS THERE ANY HELP FROM THE NEW TAX REFORM.I AM A RETIRED SCHOOL TEACHER.I NEED YOU HELP, PLEASE
Hi John, since every situation is different, we suggest calling or visiting a tax services company near you. You will then be able to determine if your new windows qualify for a tax credit in your state.
I am looking for a form to fill out to get my rebate for purchasing a energy efficiency refrigerator
Hi Florentino,
Congrats on the new energy-efficient refrigerator! If you visit energystar.gov/rebate-finder, you can enter your zip code to find if you are eligible for a rebate in your area and fill out the form.
We live in a home built in 1929 with addition made in the 90’s. The windows that are original to the home are double paned. We had them restored and reglazed and they are much more efficient now then the windows installed in the 90’s which are certified energy efficient. It was just as expensive to restore the old windows than to purchase new ones but we felt that once restored they would be nicer than any new window that we could purchase. They are now extremely energy efficient! Can we claim credits for the costs of restoring these windows and making them energy efficient?
Hi, Kathy: Great question! Congratulations on restoring your home while keeping some of the old features intact! Restoration credit might be a little trickier to come by than credits for newly installed windows, but EnergyStar has some information on its website, as does the IRS. However, since your question is more specific and nuanced, my suggestion would be to call the IRS directly at 1-800-TAX-FORM (800-829-3676) for more information. Good luck!