Residential Energy Efficiency Tax Credit Extended Through 2011

The Residential Energy Efficiency Tax Credit was amended and extended through December 2011 by the Tax Relief Unemployment Insurance Reauthorization, and Job Creation Act of 2010. On January 1, 2011 several characteristics of the credit changed from their 2010 form. Most significantly, the cap claim was reduced from $1,500 to $500. The cap is on the total amount of credits a homeowner may claim between 2006 and 2011. If a homeowner has already claimed $500 or more in credit through this allowance, they will be unable to claim new credits or improvements made during 2011.

This credit applies to energy efficiency improvements in the building envelope of existing homes. Installation costs are not included in the tax credit, only the product costs. Be prepared to separate the costs on the receipt for the homeowner.

Efficiency improvements or equipment must serve a dwelling in the United States that is owned and used by the taxpayer as a primary residence. The maximum tax credit for all improvements made in 2011 is $500. The cap includes tax credits for any improvements made in 2006-2010. If a taxpayer claimed $500 or more of these tax credits in any previous year, any purchases made in 2011 will be ineligible for a tax credit.

Homeowners need to hang on to their receipt for the installation of DEMILEC (USA) Spray Foam Insulation and the Manufacturer’s Certification Statement. When they file their 2011 taxes, the homeowner should submit IRS Form 5695 (line 52: the residential energy tax credit), the receipt and the Manufacturer’s Certification Statement with their tax return.