Residential Energy Tax Credits

If you have made energy saving improvements to your home in 2016, you may be able to take residential energy credits to reduce your income tax due.

The Residential Energy Efficient Property Tax Credit
You may be able to take a tax credit equal to 30 percent of the amount paid for residential energy efficient property during 2016.

Residential energy efficient property includes:
• Qualified solar electric property
• Solar water heating property
• Small wind energy property
• Geothermal heat pump property
• Fuel cell property (limited to $500 for each one-half kilowatt of capacity of the property)

This tax credit is limited to your tax liability, any unused portion of the tax credit can be carried forward to 2017.

The Nonbusiness Energy Property Tax Credit

You may be able to take a credit equal to the sum of:
1. Ten percent of the amount paid for qualified energy efficient improvements installed during 2016, and
2. Any residential energy property costs paid in 2016.

Qualified energy efficient improvements includes:
• Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home
• Exterior windows and skylights
• Exterior doors
• Any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically

This tax credit is limited as follows:
• A total combined credit limit of $500 for all tax years after 2005.
• A combined credit limit of $200 for windows for all tax years after 2005.
• A credit limit for residential energy property costs for 2016 of $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property.

This tax credit is limited to your tax liability, any unused portion of the credit cannot be carried forward to 2017.

We have qualified professionals to assist you on identifying and claiming these tax credits. For more information on tax strategies that may benefit your business, contact a Smith Schafer professional today at 952-920-1455 or [email protected]. We look forward to speaking with you soon.