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Home » Taxes

2014 Energy Tax Credit Details

Last updated by on 13 Comments

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

2014-energy-tax-creditsThere 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?

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I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


13 Comments »
  • Tom says:

    We just blew in extra attic insulation this past September (as a direct result of reading this blog I might add) and have already been reaping the savings. We also put in a masonry wood stove that’s been performing well. It’s great to know we’ll get even more return on our investment due to the subsidy. Thanks for the heads up G.E.!

  • Shane says:

    I haven’t yet taken advantage of the energy installation tax credit but am very welcome to the idea. It’s actually the first time I heard of it and I think it’s a great way to minimize costs. And yes, it would be great if last year’s credit would get extended into 2014… oh the home improvements I could plan for.

  • Richard says:

    I was thinking of replacing my (gas) hot water heater with one of the new gas fired tankless units. My supplier / installer mentioned that I may qualify for up to a 30 % tax credit on the installed cost. Per your web site it looks like this is not ture. Please confirm.

    Thanks,
    Richard

  • Deb says:

    I just moved and am doing insulation and converting to gas. I would love it if they extended the tax credits to 2014/

  • Shannon Casey says:

    What is the status of the tax credit extending into 2014? We were thinking of replacing our windows in our home.

  • jodi says:

    so we dont have a 2014 tax credit if i upgrade my furnace and ac?

  • Sue says:

    I am putting a new rood on and need all the help I can get.

  • Dr. T says:

    In 2014, I moved into my newly built home and added a recognized solar panel system at a cost of $40,428. I was promised a tax credit of $12,128 on my 2014 tax return. Are there any caveats associated with using this tax credit? Is it a dollar-for-dollar reduction in the tax payment required for 2014?

  • Dale says:

    The IRS just stated that only wind turbines that are “certified” can take the 30% tax credit. (IRS Notice 2015-4). I don’t see this language in the legislation that passed Congress. How can the IRS legally make this ruling, several years later without Congressional approval? Second, I want to make my own system (I’m an engineer). The way I read the IRS position, only “certified” commercial systems are eligible. The credit, passed by Congress and signed by the President never said this. How does this stand?

  • Tamara Dungan says:

    We are in the HVAC business. When we know about these credits in advance, they are a great selling tool and help our business. Learning after the fact that they are going to be renewed does us absolutely no good. Thanks again government!

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