Claiming Your Credit

Follow these steps to get all your documents in order and to claim your energy-efficiency tax credit

If you made energy-efficiency upgrades in your home, you may be able to claim a tax credit of up to $500. To properly claim your energy-efficiency tax credit, follow these steps:

Save for your records all receipts from purchases of eligible products.

Collect all manufacturer’s certification statements – these are signed statements from each manufacturer certifying that the product or component qualifies for the tax credit and often are automatically included with the products/equipment you buy. If the retailer or installer cannot provide these statements, they may be available on the manufacturer's website. Keep a copy of these statements for your records.

Fill out IRS form 5695 and attach it to your tax return, which must be filed by April 17, 2012.

Note that the credit is a dollar-for-dollar reduction of your tax liability, which makes it more valuable than a tax deduction, which only lowers your taxable income, says Gregg Wind, a partner at Wind and Stern, a Los Angeles CPA firm.

The tax credit is nonrefundable, which means it’s only available to the extent you have a tax liability. It cannot generate a refund if you owe less in taxes than the credit amount.

The credit can only be claimed once. If you claimed a home energy improvement tax credit on your 2010 taxes, you cannot take an additional credit for the same purchase on your 2011 taxes.

If you’ve already received a total of $500 or more in an energy-improvement tax credit from 2006 to 2010, you are not eligible for any more.

For full details and restrictions, visit www.energysavers.gov/financial/70010.html