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Did you know that certain energy efficient improvements made to your home may qualify you for tax credits?  

The Non-Business Energy Property Credit is worth 10% of the cost of certain qualified energy-saving items including, insulation, energy-efficient exterior windows and doors, and certain roofs. You may also qualify for a credit for installation costs of certain high-efficiency heating and air-conditioning systems, high-efficiency water heaters and stoves that burn biomass fuel.  

Another credit, the Residential Energy Efficient Property Credit, is worth 30% of the cost of alternative energy equipment and includes the cost of installation.  Qualified equipment includes solar hot water heaters, solar electric equipment, wind turbines and fuel cell property. There is no dollar limit on this credit for most types of property. If the credit is more than the tax owed, you can carry forward the unused portion of this credit to next year’s tax return.

How do you know what items qualify for the credit and how to claim it on your tax return?

Be sure to have the written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. Taxpayers can use this to claim the credit.

Use Form 5695, Residential Energy Credits, to claim these credits. For more information on this topic, refer to the form’s instructions and IRS Publication: Get Credit for Making a Home Energy Efficient.