Video: What Are Energy Tax Credits
Hi, I'm Jeremy from TurboTax with important news on how you can reduce your tax bill by saving the environment.
Did you purchase an electric car or make eco-friendly improvements to your home this year? If so, you may be eligible to reduce the amount of tax you owe by claiming one of the energy tax credits.
You can deduct up to $1,500 off your taxes when you increase the energy efficiency of your primary home by installing new air conditioning units, increasing the insulation in your walls, or by adding new windows, skylights, or doors. If the manufacturer claims the equipment will reduce energy consumption or if the product has the Energy Star label, that is all you need to qualify for the credit. If you install more expensive equipment such as solar panels and geothermal heat pumps, you will qualify for an additional credit equal to 30% of your total cost.
Purchasing an electric car will reduce your tax bill. Depending on the car's price you can receive a credit worth anywhere between $2,500 and $7,500. It is also possible to convert your gas guzzler into an electric car by purchasing a conversion kit. Save the receipts when you buy the kit as the tax credit is equal to 10% of the cost. If you qualify for any of these energy tax credits, be sure to check with your state for similar benefits.