Home Improvement Tax Incentives for 2013

Many of us are trying to save money in just about any way we can right now. One of the best ways to do this is by making energy-efficient home improvements. Although these projects can take a big bite out of an already strained budget, they can pay off over the long run in the form of tax breaks and incentives: the Tax Payer Relief Act of 2012 includes several federal tax credits for energy-saving projects installed in 2012 and 2013 that can bring you big breaks on your federal taxes.

home improvement tax incentives

Key Facts

Qualifying projects include: insulation and weatherization, energy-efficient exterior doors, windows and roofing, air conditioners, heaters, water heaters and biomass stoves.

• All projects must be installed on the taxpayer’s principal residence in the United States.
The deduction includes both the cost of materials and installation.
• There is a cumulative tax credit total of $500 over tax years 2012 and 2013. In addition, if you took a tax credit for a qualifying project between 2006 and 2011, you must deduct this from the $500 total.
• Projects must reasonably be expected to last at least five years. This can usually be satisfied by a two-year warranty.
The Specifics
The following is a list of eligible projects, including individual project caps and requirements for qualification.
• Insulation, including caulking, weather stripping and foam sealants: 10% of the product and installation cost. Must meet criteria in the 2009 International Energy Conservation Code.
• Exterior windows including skylights and storm windows: 10% of the product and installation cost up to a maximum of $200. Must meet ENERGY STAR requirements.
• Exterior doors: 10% of the product and installation cost for doors. Must meet ENERGY STAR requirements.
• Metal roofing with pigmented coating, or asphalt roof with cooling granules: 10% of the product and installation cost. Must meet ENERGY STAR requirements.
• Advanced main air circulating fan: 10% of the product and installation cost up to $50. Must have an electricity use of no more than 2% of total energy used by the furnace.
• Natural gas, propane, or oil furnace or hot water boiler: 10% of the product and installation cost up to $150. Must have an annual fuel utilization efficiency (AFUE) rate not less than 95.
Electric heat pump water heater: 10% of the product and installation cost up to $300. Must have an energy factor of at least 2.0.
• Heat pump: 10% of the product and installation cost up to $300. Must have a SEER of at least 15, an EER of at least 12.5, and an HSPF of at least 8.5.
• Central air conditioner: 10% of the product and installation cost up to $300. Must have SEER of at least 16 and an EER of at least 13.
• Natural gas, propane, or oil water heater: 10% of the product and installation cost up to $300. Must have an energy factor of at least .82 or a thermal efficiency rating of at least 90%.
• Biomass stove: 10% of the product and installation cost up to $300. Must have a thermal efficiency rating of at least 75%, heats a dwelling or water for use in a dwelling and be fueled by plant-derived fuel.

Other Resources

There are some older federal tax credits that are still in effect through December 31, 2016. These include a one-time tax credit of 30% on the cost of qualifying geothermal heat pumps, solar water heaters, solar panels, small wind turbines, or fuel cells installed in an existing or new home.

For more information, visit: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
Many states offer additional energy tax incentives to their residents. To find your state’s incentives visit: http://www.dsireusa.org/

Alex Wayne is a full-time home improvement, plumbing and HVAC blogger for MTB Mechanical in Charlotte, NC.

Pin It

Comments are closed.