2011 Tax Incentive New Changes for Home and Business

The Tax Incentives Assistance Project (TIAP), sponsored by a coalition of public interest nonprofit groups, government agencies, and other organizations in the energy efficiency field, is designed to give consumers and businesses information they need to make use of the federal income tax incentives for energy efficient products and technologies passed by Congress as part of the Energy Policy Act of 2005 and subsequently amended several times.

Update as of 1/10/11 –

Congress passed, and the President signed, the tax legislation described below in mid-December. To find out more about the changes, see individual pages in the left sidebar. TIAP has also compiled a fact sheet with information about the relevant energy efficiency tax incentives for 2010 and 2011.

Update as of 12/16/10 – Congress About to Extend And Modify Energy Efficiency Tax Incentives for Appliances, New Homes and Retrofits to Existing Homes

Today, or shortly thereafter, Congress is likely to complete action on tax legislation that modifies and extends three energy efficiency tax incentives, as a part of a much larger tax package. These tax incentives will continue to help raise the market share of efficient appliances, HVAC and insulation products, and new homes.

The legislation extends the new homes tax credit to cover 2010 and 2011 – this $2000 credit goes to the home builders and is for homes that use no more than half the energy of homes that just meet the 2003 national model energy code. The credit expired at the end of 2009 but the new bill extends this to cover new homes that are built in 2010 and 2011.

The bill also extends and updates manufacturer appliance tax credits for 2011 – the credit, which goes to manufacturers directly, is extended for one year, and the following criteria now apply:

  • Dishwashers –
  • $25 – models using no more than 307 kilowatt hours/year and 5.0 gallons of water/cycle (this is the ENERGY STAR level effective July 1, 2011)
  • $50 – models using no more than 295 kilowatt hours/year and 4.25 gallons of water/cycle
  • $75 – models using no more than 280 kWh kilowatt hours/year and 4 gallons of water/cycle

Clothes Washers –

  • $175 – top-loading models that meet/exceed 2.2 MEF, and does not exceed 4.5 WCF
  • $225 – top-loading models that meet/exceed 2.4 MEF, and does not exceed 4.2 WCF, or front-loading models that meet/exceed 2.8 MEF and do not exceed a 3.5 WCF

Refrigerators –

  • $150 – models that use 30% less energy relative to federal standard
  • $200 – models that use 35% less energy relative to federal standard

The legislation extends the 25C heating and cooling equipment and building envelope tax incentives for another year but at reduced levels. The new bill extends eligibility to the end of 2011, but reduces the incentive to the original 10% up to $500. Included are provisions which:

  • limit window incentives to $200;
  • limit oil and gas furnace and boiler incentives to $150, plus an additional $50 for efficient furnace fans;
  • limit water heater and wood heating system incentives to $300;
  • loosen the qualification for window incentives (ENERGY STAR windows now qualify);
  • and tighten the specifications for oil furnaces and boilers and gas boilers to 95% efficiency, up from the 90% efficiency in current law.

Congress is likely to consider further extensions of these incentives into 2012 and beyond next year, and TIAP will provide updates as they become available. The existing homes incentives are likely to receive a major overhaul, and there are also likely to be discussions about improving incentives for energy-efficiency investments in commercial buildings, incentives which under current law continue until the end of 2013.

While Congress extended most of the expiring federal energy efficiency tax incentives, they did not extend the incentive for hybrid trucks and buses.

IRS Forms

  • Residential Energy Efficient Property: Form 5695
  • New Homes: Form 8908
  • Vehicle Incentives: Form 8910
  • Commercial Solar Incentives: Form 3468 (Investment Credit) Note: The links above go to the IRS web site. TIAP makes every effort to keep these links up to date. IRS often does not publish new versions of forms until the beginning of the following tax year.

Additional Resources

TIAP Flyers for Residential and Commercial Incentives – Add your organization’s logo and distribute at your next event to spread the word about energy efficiency incentives.

Some additional information on tax incentives can be found HERE!

Extension Service Home Energy Community of Practice Webinar – Presentation by Jen Amann, ACEEE (4/10/2009)

Overview of Federal Energy Efficiency Tax Incentives passed as part of the American Recovery and Reinvestment Tax Act of 2009
*Updated matrix of energy efficiency incentives

RESNET has completed a survey of rating providers regarding the number of homes that their raters certified for the federal tax credit (2007 only). 23,702 homes were certified by RESNET during 2007, which is triple the number of homes certified in 2006. For more information, click here.

NREL Energy Savings Modeling and Inspection Guidelines for Commercial Building Federal Tax Deductions (1.9 MB PDF)

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