The American Taxpayer Relief Act of 2012 retroactively renewed this tax credit effective January 2012, expiring again on December 31, 2013. Any qualified equipment or energy-efficient improvements installed in 2012 or 2013 is eligible for this credit. As in previous years, the cumulative maximum amount of tax credit that can be claimed by a taxpayer in all years combined is $500. If a taxpayer has already claimed a tax credit of $500 for purchases and/or energy-efficient improvements made in any previous year, they are ineligible for additional tax credits for any new equipment purchases.
The credit applies to energy efficiency improvements in the building envelope of existing homes and for the purchases of high-efficiency heating, cooling and water-heating equipment. In order for homeowners to qualify for the tax credit the home must be in the United States and serve as the taxpayer’s primary residence.
Owners of existing homes may receive a tax credit worth 10% of the cost of upgrading the efficiency of the building’s envelope including adding additional insulation. Installation (labor) costs are not included and are capped at $500 for all improvements.
The Department of Energy reports that 80% of homes built before 1980 are under insulated. With the passage of The American Taxpayer Relief Act of 2012, you may now qualify for a 10% tax credit up to $500 by adding Cellulose Insulation to your home.