As per CRA, equipment and materials can qualify for the Nonbusiness Energy Property Credit only if they meet the standards set by the Department of Energy. The manufacturer can tell you whether a particular item meets those standards.
For this credit, the IRS distinguishes between two kinds of upgrades.
The first is "qualified energy efficiency improvements," and it includes:
- Home insulation
- Exterior doors
- Exterior windows and skylights
- Certain roofing materials
The second category is "residential energy property costs." It includes:
- Electric heat pumps
- Electric heat pump water heaters
- Central air conditioning systems
- Natural gas, propane or oil water heaters
- Stoves that use biomass fuel
- Natural gas, propane or oil furnaces
- Natural gas, propane or oil hot water boilers
- Advanced circulating fans for natural gas, propane or oil furnaces
Details of the Nonbusiness Energy Property Credit (Extended through December 31, 2021)
You can claim a tax credit for 10% of the cost of qualified energy efficiency improvement and 100% of residential energy property costs. This credit is worth a maximum of $500 for all years combined, from 2006 to its expiration. Of that combined $500 limit,
- A maximum of $200 can be for windows.
- The maximum tax credit for a furnace circulating fan is $50.
- The maximum credit for a furnace or boiler is $150.
- The maximum credit for any other single residential energy property cost is $300.
For more information, you can go to the following link:
Energy Tax Credit: Which Home Improvements Qualify?
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