As part of the 2018 Congressional budget deal signed into law, many of the previously expired Energy Tax Credits had been fully restored retroactively for 2017 (for verification, see section 40401 and 40402 are tax extenders included in the passed Bipartisan Budget Act of 2018) – but not yet for 2018. Geothermal, wind, and fuel cells were extended through 2021 to match solar.
2019 Energy Tax Credits
There are significant “Renewable Energy Tax Credits” for 30% of the costs of major energy installations. These credits are unlimited, and include labor on installation for the following:
solar water heaters
solar panels
geothermal
heat pumps
small wind turbines
fuel cells
The 30% credits decline through 2021, and are as follows:
2018: 30%
2019: 30%
2020: 26%
2021: 22%
The installations must be installed in a home you own and use as a residence (no rentals, but second homes qualify).
These energy tax credits are non-refundable, but can be carried-over to a future tax filing year. More information can be found on the Energy Star Renewable Energy Tax Credits website. Prior to the Congressional budget deal, only the solar credits had remained in place.
What About the Residential Energy Property Tax Credits?
The very popular residential “Energy Property Tax Credits” for Energy Star certified energy efficiency improvements has not yet been restored for 2018.
These popular residential energy tax credits equaled 10% of the cost of product to $500, or a specific amount from $50–$300 for the following eligible items:
Biomass Stoves: $300 credit for stoves with an efficiency of 75%+.
HVAC Air Circulating Fan: $50 for fans that use less than 2% of a furnaces energy. Central Air Conditioning: $300 for Split Systems: with SEER ≥ 16 and EER ≥ 13, or package systems with SEER ≥ 14 and EER ≥ 12.
Gas, propane, or oil hot water boiler:$150 with AFUE ≥ 95.
Natural gas, propane, or oil furnace: $150 with AFUE ≥ 95.
Insulation: 10% of the cost, up to $500 (not including installation costs). Includes air sealing caulk, spray foam, house wrap, and weather stripping.
Roofs: 10% of the cost, up to $500 (not including installation costs) on metal roofs with appropriate pigmented coatings and asphalt roofs with appropriate cooling granules that also meet ENERGY STAR requirements.
Gas, Oil, or Propane Hot Water Heater: $300, in the case of a storage water heater (20-55 gallons), an energy factor of at least 0.82 or a thermal efficiency of at least 90%. In the case of any other water heater, an energy factor of at least 0.90 or a thermal efficiency of at least 90%.
Electric Heat Pump Water Heater: $300 with Energy Factor ≥ 2.0.
Windows, Doors & Skylights: 10% of the cost, up to $500, but windows are capped at $200 (not including installation costs). Must be version 6.0 ENERGY STAR qualified.
If you want to buy any of these types of products, it would be wise to focus on the above specs when doing so.
How to Claim the Energy Tax Credit:
If you meet eligibility criteria above, you must file IRS form 5695.
2018 & 2019 Energy Tax Credits Discussion:
Have you or will you take advantage of the 30% energy installation project tax credit? Please share the cost, savings, and any other details of your project in the comments.
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