You’re Here: Home » Ways to Save Money » Energy Tax Credit

Save on Your Energy Bills Now and Later.

Save now with an energy tax credit.

Thanks to the American Recovery and Reinvestment Act of 2009, if you purchased qualifying materials in 2009 or 2010, you can get a 30 percent tax credit on energy efficient improvements made to your home, including adding insulation. And Congress just extended the tax credit (albeit with lower credits) through the end of 2011 so there is still time to save if you have not already done so.

Save later on your energy bills.

Adding insulation and sealing air leaks is the single most cost-effective way to make your home more energy efficient. To maximize your energy savings, you should have up to 19 inches (R-49) of insulation in your attic. Adding insulation not only helps lower energy bills, it will help keep your home more consistently comfortable. Properly insulating is more cost-effective than adding energy efficient windows or other improvements.

Two more places that are easy to insulate are crawl spaces and basements. If these areas of your home are not insulated or are under-insulated, this is the year to take care of it. Start now, and lower your energy bills for the life of your home.

The details of the 2011 tax credit.

The extended tax credit applies to the cost of materials only, not the cost of installation. The credit is 10 percent or up to a maximum of $500 on the purchase price of insulation or other qualified energy efficiency products. Here’s how to get it:

The tax credit applies only to items bought in 2011. Include the information on the tax return you file in 2012.
If you previously applied for the credit in 2009 or 2010 of $500 or more, you won’t be able to apply for this.
Save your receipts for all qualified purchases—this is the receipt you got from the store, not your credit card statement.
Fill out Manufacturer's Certification Statement for each item—you may need to fill out Manufacturer's Certification Statements for non-insulation products from other manufacturers as well.
File all documentation with your tax records—do not send the documents with your tax return. You'll need to use IRS Form 5695 to claim the credit.

Your purchase must be used in your primary residence. Find out more now!

If you purchased insulation in 2009 or 2010, read below.

The previous tax credit applied to the cost of materials only, not the cost of installation. The credit was $1500 or up to 30 percent of the purchase price of insulation or other qualified energy efficiency products. Here’s how to get it:

The tax credit applies only to items bought in 2009 or 2010. Include the information on the tax return you file in 2010 or 2011, respectively.
Save your receipts for all qualified purchases—this is the receipt you got from the store, not your credit card statement.
Fill out Manufacturer's Certification Statement for each item—you may need to fill out Manufacturer's Certification Statements for non-insulation products from other manufacturers as well.
File all documentation with your tax records—do not send the documents with your tax return. You'll need to use IRS Form 5695 to claim the credit.