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Home > Homeowners > 2011 Federal Energy Efficiency Tax Credits

2011 Federal Energy Efficiency Tax Credits

Please note: This information only applies to qualified products installed from January 1, 2011 to December 31, 2011.

On December 17, 2010, President Obama signed H.R. 4853 known as the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This Act is a compromised tax bill that made some significant changes to energy efficiency tax credits.

Tax Credit Details for Homeowners:

The efficiency levels required reflect the highest tier of the CEE High-efficiency Specification for Residential HVAC Systems as of January 1, 2009. Please note: Equipment listed in the chart below (except water heaters, which only needs to achieve one of the efficiency specifications) must meet all performance specifications for its category. For example, a tax-credit eligible split central air conditioner must have stated performance ratings of 13 EER and 16 SEER.
Improvements made in 2011 will be claimed on your 2011 taxes (filed by April 15, 2012)
The lifetime credit cap of $500 was reinstated. If you have claimed more than $500 in 25C tax credits since January 1, 2005, you are disqualified from any further credits.

Product Type	Tax Credit Specification	Tax Credit	Effective Date	Find Qualifying Equipment
Residential Central A/C	Split: EER>=13 and SEER>=16 Packaged: EER>=12 and SEER>=14	The tax credit is for $300	Jan.1, 2011 – Dec. 31, 2011	Go to Air Conditioners and Air Conditioner Coils and select Yes for 'Eligible for Federal Tax Credit'.
Residential Air-Source Heat Pumps	Split: HSPF >= 8.5 and EER >= 12.5 and SEER >= 15 Packaged: HSPF >=8 and EER >= 12 and SEER >= 14	The tax credit is for $300	Jan.1, 2011 – Dec. 31, 2011	Go to Heat Pumps and Heat Pump Coils and select Yes for 'Eligible for Federal Tax Credit'.
Residential Geo-thermal Heat Pump	Closed Loop: EER >= 14.1 COP >= 3.3 Open Loop: EER>=16.2 COP>=3.6 Direct Expansion: EER>=15 COP>=3.5	This one-time tax credit is for 30% of the total investment and is not limited to any lifetime home improvement cap.	The credits are available for systems "placed in service" from Jan. 1, 2006 through Dec. 31, 2016.	Go to either the Water-to-Air and Brine-to-Air Heat Pumps or Direct Geoexchange Heat Pumps directories and select Yes for 'Eligible for Federal Tax Credit'.
Residential Gas, Oil, Propane Furnace or Hot Water Boiler	Furnaces: Gas >= 95% AFUE Oil >= 95% AFUE Propane >= 95% AFUE Boilers: AFUE>=95	The tax credit is for $150	Jan.1, 2011 – Dec. 31, 2011	Go to: Furnaces Go to: Boilers and select Yes for Tax Credit Eligible under Advanced Search
Advanced Main Air Circulating Fan	No more than 2% of furnace total energy use. Read this IRS Guidance if the fan qualifies, but the furnace does not. Read AHRI Safe Harbor Proposals to IRS.	The tax credit is for $50	Jan.1, 2011 – Dec. 31, 2011
Residential Gas, Oil, Propane Water Heater	Energy Factor >= 0.82 or Thermal Efficiency>=0.90	The tax credit is for $300	Jan.1, 2011 – Dec. 31, 2011	Go to: Residential Water Heaters /Commercial Water Heaters and select Yes for Tax Credit Eligible under Advanced Search
Residential Electric Heat Pump Water Heater	Energy Factor >= 2.0	The tax credit is for $300	Jan.1, 2011 – Dec. 31, 2011	Go to: Residential Water Heaters /Commercial Water Heaters and select Yes for Tax Credit Eligible under Advanced Search

1 A Manufacturer’s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.

How to Obtain the Tax Credit
Eligible contractors need to fill out IRS Form 8908 to get the tax credit. The IRS has provided the following guidance regarding the tax credits for constructing energy efficient new homes available under the Energy Policy Act of 2005:

IRS Notice 2006–27 provides guidance for the credit for building energy efficient homes other than manufactured homes.

IRS Notice 2006–28 provides guidance for the credit for building energy efficient manufactured homes.

Tax Deductions for Commercial Buildings
A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems. These tax deductions are available for systems “placed in service” from January 1, 2006 through December 31, 2013.