Tax Credits for Home Improvements Made in 2014

It is almost that time of year again, tax time. Ok, so maybe you have a couple of months left to get on board, but it is not too early to start thinking about your taxes and to start getting all your ducks in a row for filing time.

Did you make any home improvements in 2014? You may be eligible for certain residential energy tax credits.

This year there has been an extension of some energy tax credits for specific residential home improvements made in 2014. If you replaced windows or roofing, bought a new water heater, or improved your home’s insulation or HVAC system, you may be eligible.

The following information was taken from Consumer Reports and can help you determine exactly how much of a credit you are eligible for.

If you replaced any windows, doors or skylights or installed new ones that meet Energy Star standards, you are eligible for a tax credit. You don’t have to replace all your windows and doors to qualify and you can claim the credit if you installed a window or door where there wasn’t one before. The tax credit here is 10 percent of the cost up to $500. Windows are capped at $200 and cost of installation cannot be included.

Water heating can account for up to 25 percent of the energy used in your home. Qualifying water heaters include gas, oil or propane units with an Energy Factor (overall efficiency) of 0.82 or more or a thermal efficiency of at least 90 percent. Electric heat pump water heaters with an energy factor of 2.0 or more also qualify. The tax credit is $300.

Typical bulk insulation products can qualify for a tax credit, such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place, according to Energy Star. Products that air seal (reduce air leaks) can also qualify, as long as they come with a Manufacturer’s Certification Statement, including weather stripping, spray foam in a can, caulk and house wrap. The tax credit is 10 percent of the cost, up to $500. Does not include installation but you can install the insulation/home sealing yourself and still get the credit.

Some heating, ventilation and air conditioning equipment qualifies for an energy tax credit. For full details see the Energy Star website. Here are the improvements.

  • Central air conditioning, $300 tax credit.
  • Advanced main air circulating fan, $50 tax credit.
  • Air source heat pumps, $300 tax credit.
  • Gas, propane or oil hot water boiler. $150 tax credit, including installation costs.
  • Natural gas, propane or oil furnace, $150 tax credit.

In order to claim your tax credit, You will need to file IRS form 5695 with your 2014 taxes. Be sure to keep a copy of the Manufacturer’s Certification Statement and any receipts or itemized bills. Tax credits for such renewable energy sources as wind, solar and geothermal will be available until the end of 2016.

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