2014 Energy Tax Credit Details
Energy Tax Credits
Well, we had some late changes on energy tax credits for 2014 after all.
The energy tax credits for common residential energy efficiency improvements were restored at the last minute for the 2014 year through the Tax Increase Prevention Act of 2014, much like they were extended in the prior year. This is ultimately great news if you made a qualified high-efficiency upgrade (specifics highlighted below) in 2014.
This includes tax credits equal to 10% of cost up to $500, or a specific amount from $50–$300 for the following eligible items:
- Biomass Stoves: $300 credit for stoves with an efficiency of 75%+
- HVAC Air Circulating Fan: $50 for fans that use less than 2% of furnaces energy
- Central Air Conditioning: $300 for Split Systems: with SEER ≥ 16 and EER ≥ 13, or package systems with SEER ≥ 14 and EER ≥ 12
- Gas, propane, or hot water boiler: $150 with AFUE ≥ 95
- Natural gas, propane, or oil furnace: $150 with AFUE ≥ 95
- Insulation: 10% of the cost, up to $500 (not including installation costs)
- Roofs: 10% of the cost, up to $500 (not including installation costs) on metal roofs with appropriate pigmented coatings and asphalt roofs with appropriate cooling granules that also meet ENERGY STAR requirements.
- Gas, Oil, or Propane Hot Water Heater: $300 with Energy Factor ≥ 0.82 OR a thermal efficiency of at least 90%
- Electric Heat Pump Water Heater: $300 with Energy Factor ≥ 2.0
- Windows, Doors & Skylights: 10% of the cost, up to $500, but windows are capped at $200 (not including installation costs). Must be ENERGY STAR qualified.
More on those requirements can be found on the Energy Star Energy Tax Credit site.
Unless these credits are extended at a later time, they will not be applicable for 2015 taxes.
There are also big hitter tax credits, which I’ll cover next.
30% Energy Tax Credits in 2014
There are also the big 30% tax credits that continue through 2016 for higher cost energy installation projects.
Three of them have no upper limit and include installation costs on primary and secondary homes (excludes rentals):
- geothermal heat pumps
- solar (includes photovoltaic and solar water heaters)
- small wind turbines (residential only and no more than 100 kW)
One of them has a cap of up to $500 per 0.5 kW of power capacity and only principal residences apply (installation costs are also included):
- fuel cells (efficiency of at least 30% and capacity of at least 0.5 kW)
All must meet Energy Star requirements in order to be eligible for the tax credit.
2014 Energy Tax Credits Discussion:
- Have you or will you take advantage of a 30% energy installation project tax credit? Tell us about your project costs and tax credit savings.
- Would you have purchased anything in 2014 had the credits been active all year long, versus retroactively approved at the 11th hour?