About the 2011 Windows and Doors Tax Credit

The  energy tax credit for 2011 is not nearly as generous as the credit was in 2010 when you were able to deduct up to $1500 as as long as it was 30% of the total installed cost of various home efficiency measures like window installations, hot water heaters and more.  While the 2011 tax deal Obama just signed didn’t focus much on the tax credit, but rather the lack of a tax rate increase, the inheritance tax and the extension of unemployment benefits, there is a provision in the deal for 2011 that does extend the energy tax credit but the benefit is minimal.

2011 Energy Tax Credit Details:

  • The old generous credit titled the 2009-2010 American Recovery and Reinvestment Act (ARRA) – was allowed to expire and was not renewed.
  • The new energy efficient tax credit is only a 10% credit, up to a maximum of $500.  The prior cap had been up to $1500, which will expire on Dec 31, 2010.
  • Of that, only $200 for EnergyStar windows can be applied.
  • Furnaces are only allowed to get a $200 credit and they must now be 95% efficient, more stringent than the 90% requirement from 2009-2010.
  • Wood heating systems are eligible for a max $300 credit.
  • To reiterate, of the various programs you may take advantage of, the cap is $500 total IF you haven’t taken advantage of the credit previously.
  • Anyone that took advantage of the prior tax credits cannot utilize the credit in 2011 (no double-dipping).

Source: www.EnergyStar.gov

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