How to Claim the Energy Star Tax Credit

The energy star tax credit is administered by the federal government as an attempt to accomplish two goals at the same time: stimulate consumer spending and reduce our carbon footprint. Follow these steps to ensure you can take advantage of the energy star tax credit and use the tax credit incentives to help the environment.

Instructions

1. Become familiar with the types of appliances you can deduct.

   The energy star tax credit is one of the tax credit incentives that have strict standards by the government. You can deduct energy efficient furnaces (oil and gas only), washers and driers, refrigerators, etc. You can check the government's energy star site in the resource section of this page or talk to any company selling appliances.

2. Keep the manufacturer's certification statement.

   You will need this certification statement to prove you qualify for the tax credit incentives attached to the energy start tax credit. It should be a signed copy, but does not need to be submitted with taxes, just retained for records supporting your tax credit incentives.

3. Fill out IRS form 5695 for the year you start using the appliance.

   This only applies to 2009-2010. You will either claim the energy star tax credit for 2009 or for 2010. Be sure to fill out the credit for the year you actually start using the appliance. These tax credit incentives expire after 2010.

4. 

   Record the energy star tax credit amount on line 52 of your 1040.

   If you are filling out your own tax forms the resulting tax credit incentives amount from 5695 should be reported on line 52 and subtracted from your total tax owed. This is a huge benefit since it decreases taxes owed, not just adjusted gross income. You can deduct up to $1500 total (even if you bought more than one energy star qualified appliance.)

   * See more tips on the energy star tax credit and tax credit incentives below.

Tips & Warnings

• Be sure to keep all documentation of tax credit incentives in case of audit.

• Not all energy star qualified appliances can be deducted on your taxes. Read form 5695 instructions or consult with your tax professional.

• Be sure to attach form 5695 to your 1040 tax return.

• See related articles above for more help with tax credit incentives.

Resources

• Energy Star Tax Credit Government Site