2011 Residential Energy Efficiency Tax Credits

The passage of H.R. 4853 (see Section 710 on pages 19 and 20) or the Bush Tax Cut Extension, also included a one year extension of federal tax credits for residential energy efficiency improvements.  There are, however, some major changes to this program.  Before 30% percent of the costs of doors, windows, insulation, and some roofing were eligible for the tax credit with a maximum credit of $1500 per year.  The extension of this program has reduced the credit to 10% of incurred costs and with a $500 lifetime cap.  Previous credits are not impacted by the lifetime cap, but do count toward the total.  The tax credit for windows is further limited to $200.  Also under the extension a $50 credit is available for advanced main air circulating fans, $150 for qualified furnaces or boilers, or $300 for qualified electric heat pumps and electric heat pump water heaters.  These items are still subjected to the same $500 lifetime cap.  For more specific information on these requirements see Section 25C of the Internal Revenue Code.