How to Claim Your 2011 Energy Tax Credits

While the 2011 federal energy tax credit of $500 is a far cry from what it was in 2009 and 2010, it is better than nothing! If you upgraded one or more of the following systems in 2011, you may be eligible to take advantage of the tax credit:

  1. Biomass Stove
  2. Heating, Ventilation, Air Conditioning
  3. Insulation
  4. Roofs (metal or asphalt)
  5. Water Heaters (non-solar)
  6. Windows, doors, skylights
  7. Storm windows and doors
Remember, with a credit you get a dollar for dollar reduction in your tax liability! Below are a few limits to the tax credit:
  1. Credit only extends to 10% of the cost (not 30% like in year’s past). For example, you would need to spend $5,000 to get the full $500 credit.
  2. $500 is a lifetime limit. If you already claimed your $500 credit in 2009 and 2010 combined, then you are not eligible. However, if you only took $200 in the last two years, then you are still eligible to receive the remaining $300 in 2011.
  3. Check with your accountant, but with some systems the cap is less than $500. For example, there is a $200 cap on upgrading your windows.
  4. Not all products are created equal. Improvements have to meet the IRS energy-efficient standards to qualify for the tax credit. Find out what is approved at
  5. Tax credits cover installation cost SOMETIMES…Installation is covered for systems such as Biomass Stoves, HVAC, and non-solar water heaters, but is NOT COVERED for insulation, roof, windows, doors or skylights.
How to claim your credit:
  1. Determine if the system you installed is eligible by checking at
  2. Save system receipts and manufacturer certifications.
  3. File IRS Form 5695 with the rest of your tax forms in 2012.

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