You can't claim Energy Star appliances or water-saving improvements like low-flow toilets, low-flow shower-heads, or xeriscaping on your federal return. But many state and local governments and utility companies offer incentives or rebates for energy- or water-saving home improvements. An online search will reveal what your state has to offer (for example, you might search for Arizona toilet rebate or California water saving incentives).
Under the Residential Clean Energy Credit, you can get a federal tax credit for installing alternative energy equipment such as:
- Solar electric property
- Solar water heaters
- Geothermal heat pumps
- Small wind turbines
- Fuel cell property
If you made energy-efficient improvements to your home like energy-saving roofs, windows, skylights, and doors, you may be able to claim the Energy Efficient Home Improvement Credit for 30% of amounts paid for qualified energy efficiency improvements, up to an annual cap of $1,200, or fixed-dollar amounts ranging from $150 to $600 for energy-efficient property, including:
- Central air conditioners
- Water heaters
- Home energy audits
- Doors and windows
These items have an annual cap of up to $2,000:
- Qualified heat pumps
- Biomass boilers
- Biomass stoves
Learn where to enter qualified energy-saving improvements in TurboTax.
