Equipment Tax Credits for Primary Residences

**Please note: The current tax credits for Residential Energy Efficiency (Equipment Tax Credits for Primary Residences) expired on December 31, 2021. As of January 5, 2022, there is no approved extension of these tax credits. Any extension/renewal of these credits is still pending approved legislation by Congress. We will update our website with updates when there is an approved bill. The tax credits for Residential Renewable Energy Products are still effective, as written on this site, through December 31, 2023.

JANUARY 2021: The  Non-Business Energy Property Tax Credits were retroactively extended from 12/31/2017 through 12/31/2021

Tax Credit:  10% of cost up to $500 or a specific amount from $50-$300.
Expires:  December 31, 2021
Details:  Must be placed in service in an existing home which is your principal residence by December 31, 2021.  New construction and rentals do not apply.

Residential Energy Property Costs:

Air Source Heat Pumps

heat umpHeat pumps that are ENERGY STAR certified meet the requirements for this tax credit.

Tax Credit Amount:  $300

Requirements
Split Systems:
HSPF >= 8.5
EER >= 12.5
SEER >= 15

Package systems:
HSPF >= 8
EER >= 12
SEER >= 14

See Definitions.

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Central Air Conditioning (CAC)

cacAir conditioners recognized as ENERGY STAR Most Efficient meet the requirements for this tax credit.   To verify tax credit eligibility, ask your HVAC contractor to provide the Manufacturer Certification Statement for the equipment you plan to purchase.

Tax  Credit Amount:  $300

Requirements
Split Systems:

SEER>= 16
EER >= 13

Package systems:
SEER >= 14
EER >= 12

See definitions.

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Gas, Propane, or Oil Hot Water Boiler

altGas powered boilers that are recognized as ENERGY STAR Most Efficient meet the requirements of this tax credit.

Tax Credit Amount:  $150

Requirements
AFUE >= 95

Tax Credit includes installation costs.

See definitions.

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Gas, Propane or Oil Furnaces and Fans

altGas furnaces that are ENERGY STAR certified (except those for U.S. South only) meet the requirements for the furnace tax credit. Gas and oil furnaces that have earned the ENERGY STAR include fans that meet the requirements of the fan tax credit.

Tax Credit Amount:  $150

Requirements
AFUE >= 95

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Water Heaters (non-solar)

Gas, Oil, Propane Water HeatersGas, Oil, Propane Water Heater

Certain ENERGY STAR certified gas water heaters meet the requirements for this tax credit. Water heaters account for 12% of the energy consumed in your home.

Tax Credit Amount:  $300

Requirements
Uniform Energy Factor (UEF) >= 0.82 OR a thermal efficiency of at least 90%.

See definitions.

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Electric Heat Pump Water HeaterElectric Heat Pump Water Heater

Most ENERGY STAR certified water heaters meet the requirements of this tax credit. Water heaters account for 12% of the energy consumed in your home.

Tax Credit Amount:  $300

Requirements
Uniform Energy Factor (UEF) >= 2.2

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Advanced Main Air Circulating Fan

An Advanced Main Air Circulating Fan is an efficient fan, or blower motor which blows the air that your furnace heats up through the duct system.

Tax Credit Amount:  $50

Requirements
Must use no more than 2% of the furnace's total energy.

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Biomass Stoves

Biomass stoves burn biomass fuel to heat a home or heat water. Biomass fuel includes agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including acquating plants), grasses, residues, and fibers.

Tax Credit Amount:  $300

**Please note: This tax credit may still be claimed on your 2020 tax return for qualifying purchases and installations completed before December 31, 2020. 

Effective January 1, 2021, these systems will qualify as a Renewable Energy Tax Credit.

Beginning in 2021, if you purchase and install a wood or pellet stove or larger residential biomass heating system with a Thermal Efficiency Rating of at least 75%, you will be able to claim a 26% tax credit that is uncapped and based on the full cost (purchase and installation) of the unit. The credit will remain at 26% throughout 2021 and 2022, and reduce to 22% in 2023.

The credit must be claimed on the tax return for the year the product installation is completed. Therefore, any product purchased in 2020 that qualifies for the new credit, but is not installed until 2021, should be claimed under the new credit on your 2021 tax return.

Requirements:
Thermal efficiency rating of at least 75%

More Information

How to apply

Wood Burning Efficiency and Safety

Qualified Energy Efficiency Improvements:

Please note: Tax credit DOES NOT INCLUDE INSTALLATION FOR THE FOLLOWING PRODUCTS.

Insulation

altAdding adequate insulation is one of the most cost-effective home improvements that you can do.

Tax Credit Amount:  10% of the cost, up to $500 (NOT INCLUDING INSTALLATION)

Requirements
Typical bulk insulation products can qualify, such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place.

Products that air seal (reduce air leaks) can also qualify, as long as they come with a Manufacturers Certification Statement, including:

  • Weather stripping
  • Spray foam in a can, designed to air seal
  • Caulk designed to air seal
  • House wrap

NOTE: Tax Credit does NOT include installation costs.

See definitions.

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Roofs (Metal & Asphalt)

This tax credit is for ENERGY STAR certified metal and asphalt roofs with pigmented coatings or cooling granules designed to reduce heat gain. Certified roof products reflect more of the sun's rays, which can lower roof surface temperature by up to 100F, decreasing the amount of heat transferred into your home.

Tax Credit Amount:  10% of the cost, up to $500 (NOT INCLUDING INSTALLATION)

Requirements
"Metal roofs with appropriate pigmented coatings"
and "asphalt roofs with appropriate cooling granules" that also meet ENERGY STAR requirements.

NOTE: Tax Credit does NOT include installation costs.

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Windows, Doors & Skylights

alt text

Windows, doors and skylights that earn the ENERGY STAR save energy, improve comfort and help protect the environment.

Tax Credit Amount: 10% of the cost, up to $500, but windows are capped at $200. (NOT INCLUDING INSTALLATION)

Requirements
Must be ENERGY STAR certified.

You do not have to replace all the windows/doors/skylights in your home to qualify.  And it doesn't need to be a replacement either - installing a new window where there wasn't one previously (like in an addition) qualifies.

Tax credit does not include installation costs.

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