Tax Credits for Adding or Replacing Insulation

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Published: January 24, 2012
By: Gil Rudawsky
1Comment
4 People Did It

The 2010 energy tax credit for adding insulation is gone, but a smaller one in 2011 is better than nothing.

Effort: Low 1 day (research)
Saves: High $600/yr (in Northeast)
Investment: Med $1,000-$2,500 (insulate attic)

Whether it’s summer heat or winter cold, insulation makes your house a lot more livable. And if you added insulation in 2011, you may be eligible to collect a $500 energy tax credit.

Tax credit limits and deadlines:

10% of expenditures, up to $500 for the year, for all energy improvements combined.

Insulation must have been installed by Dec. 31, 2011.

Save receipts and labels for Uncle Sam.

Be sure to file IRS Form 5695 with your 2011 return.

The Energy Star site is your safest bet for information on how to get the credit. Energy Star has been pretty flexible on what it allows for this credit:

Batts

Rolls

Blow-in fibers

Rigid boards

Expanding spray

Pour-in-place

Products that reduce air leaks also qualify:

Weather stripping (such as fabric, foam, or metal to provide a seal)

Spray foam in a can, designed to air seal

Caulk designed to air seal

House wrap

Installation isn’t covered.

Don’t rely solely on contractors who may not know the details or who promise their products will get the credit in order to make a sale.

As of January 2012, the feds haven’t extended the energy tax credits for insulation beyond 2011.

Next: Insulation costs

Gil Rudawsky

Gil Rudawsky has covered business and consumer issues for 18 years, most recently as a deputy editor at the Rocky Mountain News. He lives in a house built in the 1930s, and always keeps the home’s character in mind when making upgrades.

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