This credit applies to equipment placed in service by Dec. 31, 2007. Congress is now considering extensions of this credit, but at this time, equipment placed in service in 2008 is not eligible for credits.
Consumer Tax Incentives
Home Shell: Insulation, Windows, Sealing
What is the tax credit for existing homes?
Existing homes are eligible for a series of efficiency measures. For some measures, such as insulation, a taxpayer can take a credit of up to 10% of the cost. There is a $500 cap on the credit per home, including the amount received for heating and cooling equipment, as described in the next section. Lower caps are set on credits for some individual measures.
These credits are available for buildings or systems placed in service from January 1, 2006, through December 31, 2007. The $500 cap applies to each home over this two year period, so if you take a $350 credit the first year, the maximum credit in the second year is $150.
Read an IRS summary of the credit here.
What is eligible for the federal tax credits?
Eligible measures are:
- Added insulation to walls, ceilings, or other part of the building envelope.
- Replacement windows and skylights: credit capped at $200.
- External doors
- Sealing cracks in the building shell and ducts to reduce infiltration and heat loss.
- Pigmented metal roofs.
Only materials (insulation, windows, sealants, etc.) are eligible and not the labor to install these materials.
Efficiency levels that qualify for the incentive are:
- Added insulation and replacement doors to bring insulation and doors up to levels specified in the 2001 IECC model energy code.
- Replacement windows meeting the requirements in the 2000 IECC model energy code. Energy Star windows will always qualify. In addition, storm windows are eligible if they existing window plus the new storm window meet the window requirements in the 2001 IECC.
- Sealing cracks and holes in the building shell and ducts - under the IECC these should be sealed so sealing remaining leaks is consistent with the IECC.
- Metal roofs: pigmented coatings must meet Energy Star requirements.
New- View IECC Climate Zones by state and county, and IECC 2004 Supplement Edition R-values and U-factors for insulation, windows, and doors (8MB PDF).
Manufacturers and retailers should be able to help you tell whether a specific product qualifies.
What do I need to do to qualify for the incentives?
Under the IRS rules, manufacturers need to certify that specific measures are eligible. Homeowners should obtain a copy of this certification from the manufacturer, installer or retailer when buying these products. Certifications need not be submitted to the IRS, but should be kept on file in case the IRS has questions. Homeowners should also make notes on when each eligible measure is installed- only measures "placed in service" in 2006 and 2007 are eligible.
Click here to access IRS guidance on qualifying energy-efficient property.
Where can I find out more about qualifying products?
- Added insulation:
- Replacement windows:
- Duct sealing:
- Air infiltration reduction:
- Home Energy Ratings and Related Services:
- Information on Qualifying Roofs
