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Residential Energy Tax Credit Overview

Once again, the Residential Energy Tax Credit has been extended for 2021. This allows homeowners to receive a tax credit for 10% of the energy-improvement cost, up to $500. The improvement must be on their primary residence, and eligible property includes physical home, condo, apartment, houseboat, mobile home, and manufactured homes are eligible . There is actually a long list of qualified improvements, including:

  • Insulation

  • Windows

  • Doors

  • Solar Panels

  • Asphalt or Metal Roof (Roofing material only, not any structure)

  • HVAC systems, including

  1. Heat Pumps

  2. Central Air Conditioning Systems

  3. Furnaces

  4. Hot Water Heaters

  5. Biomass Stoves

New construction and rental homes/units do not qualify for the tax credit. You will need to maintain documentation that justifies the expense such as invoices and canceled checks to the contractor. Make sure your CPA completed IRS Form 5695 so that you can receive the credit. This tax credit is non-refundable, meaning it can reduce the amount of tax you have to pay all the way down to $0.


Still have questions? Reach out today and have a conversation, do not leave your hard earned money to the government.



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