Making home energy efficiency improvements is always a good financial investment, but it was particularly smart to complete your retrofits last year. Up to $500 worth of federal tax credits for energy efficiency projects expired on Dec. 31, 2011, and it is not clear if Congress will reinstate them for this year, according to the Alliance to Save Energy
Eligible home sealing retrofits:
roofs, insulation, weather stripping, caulking, windows, doors and skylights
You can receive a tax credit for 10 percent of the cost of the equipment, up to $500, for new metal or asphalt roofs, retrofits that seal home air leaks and energy-efficient doors and skylights. New windows are also eligible for a 10 percent tax credit, but this incentive is capped at $200. These incentives for home sealing retrofits do not apply to installation fees - only the cost of the equipment.
A tax credit is generally more lucrative than a tax deduction: A deduction removes a percentage of the taxes owed, while a credit reduces your taxes dollar-for-dollar.
READ: Home Weatherizing Tips for Renters and Owners
Eligible home heating and cooling equipment:
high-efficiency furnaces, boilers, air conditioners and water heaters, as well as air circulating fans, biomass stoves and geothermal heat pumps
Incentives vary for equipment that heats and cools your home or warms up your water: $50 for an air circulating fan, $150 for furnaces and hot water boilers, and $300 for biomass stoves, central air conditioning units and water heaters.
Visit Energy Star's website
to identify the home sealing products and heating and cooling equipment that qualify for these tax credits and for tax filing instructions. The new equipment must have been installed by Dec. 31, 2011, in your primary residence that you own - not a new home or rental (new homes are eligible for separate energy-efficiency tax credits
Note that there is a $500 lifetime limit for energy efficiency tax credits, so if you received over $500 in these tax credits from 2006-2010, you are not eligible for any more credits on your next tax return.
Finally, make sure to hold on to your receipts: You won't need to submit them with your taxes, but keep them in your records in case of an audit.
Other rebates and incentives:
Even if you didn't purchase a product that qualifies for a federal tax credit, you may still be able to receive rebates and other incentives from your city, state or local utility. Call your local agencies for more information, and visit the Database of State Incentives for Renewables and Efficiency.
Flickr image courtesy of James Bowe