Home improvements increase the value of your home while making your home feel fresh and new. Have you considered making an improvement to the energy efficiency of your home? If you make significant improvements, you can qualify for a tax credit. It is subtracted from the amount of taxes you owe and could result in big savings at tax time. Upgrade your home today and save on your tax return in April.
What is the Residential Renewable Energy Tax Credit?
The Residential Renewable Energy Tax Credit is the credit you will qualify for if you make improvements to your home’s energy efficiency. It includes improvements to solar, geothermal, fuel cell, and wind technology used to upgrade your home. The tax credit is 30 percent of the cost of alternative energy equipment installed on or in your home. This amount does include installation. If the credit is more than the tax you owe for that year, carry forward the unused amount for next year’s return.
What is the maximum credit I can receive from renewable energy improvements?
There is no maximum amount or limit on solar, wind, and geothermal energy equipment. For fuel cells, the maximum amount is $1000 per kilowatt of capacity.
How do I qualify for the Residential Renewable Energy Tax Credit?
Several purchases qualify, including solar electric systems, solar water heaters, fuel cells, small wind energy property, and geothermal heat pumps. Install one of these in your home, keep your receipts, and use them to put into your tax return.
How does the Tax Cuts and Jobs Act affect energy credits?
The wind, geothermal, and fuel cell credits are only good through tax year 2017. However, the solar credit will remain intact until tax year 2019. Then it will be reduced every year through tax year 2021.
This article is up to date and accounts for tax law changes for tax year 2018 (tax returns filed in 2019). Learn more about tax reform enacted under the Tax Cuts and Jobs Act here.