Consumer Energy Tax Incentives
What the American Recovery and Reinvestment Act Means to You


A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.

Fuel-efficient vehicles and energy-efficient appliances and products provide many benefits such as better gas mileage –meaning lower gasoline costs, fewer emissions, lower energy bills, increased indoor comfort, and reduced air pollution.

In addition to federal tax incentives, some consumers will also be eligible for utility or state rebates, as well as state tax incentives for energy-efficient homes, vehicles and equipment. Each state’s energy office web site may have more information on specific state tax information.

Please see the ENERGY STAR® page on Federal Tax Credits for Energy Efficiencyfor more details on federal incentives and the Database of State Incentives for Renewables and Efficiency(DSIRE) for information on federal, state, local, and utility incentives.


Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes can receive a tax credit for 10% of the cost, up to $500, for improvements "placed in service" starting January 1, 2011, through December 31, 2011. See's Federal Tax Credits for Energy Efficiencyfor a complete summary of energy efficiency tax credits available to consumers. Tax credits apply only to the cost of the material and not the labor to install it.