Insulation Tax Credit
If you’re planning to add insulation to your home, you should know that the US Government is offering an insulation tax credit that can save you money. The current tax credit for insulation expires on December 31, 2011, so now is the time to take advantage of the offer.
How Much Can I Save with the Insulation Tax Credit?
The insulation tax credit covers 10% of the cost of the insulation, up to $500. The tax credit does not cover installation costs – only the cost of the insulation. Also important to note is that the insulation tax credit only applies to insulation added to an existing home, and that home must be your principal residence. Unfortunately, rental properties and new constructions don’t qualify for this tax credit.
Which Products Qualify for the Tax Credit?
The insulation tax credit covers several types of insulation, including batt, rolls, blown-in, expanding spray, pour-in-place and rigid boards. And the insulation tax credit covers more than just insulation. It also covers air sealing products used to reduce air leaks, including:
- Weather stripping
- Caulk (if designed for air sealing)
- Spray foam in a can (if designed for air sealing)
- House wrap
Please note that these products qualify only if they come with a Manufacturer’s Certification Statement. There is no requirement for who must install the insulation or weatherization products in order to be eligible for the tax credit, so you may hire a contractor or choose to do the installation yourself.
How Do I Apply for the Insulation Tax Credit?
If your insulation or weatherization products were installed in 2011, you’ll need to submit IRS Form 5695 with your 2011 taxes. You’ll enter this tax credit on the IRS 1040 form. The 2011 versions of Forms 5695 and 1040 will be available in early 2012. Be sure to save all your receipts and the Manufacturer's Certification Statement for your records.
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Your home energy audit proved to be very informative and helpful. I was not aware of the updraft created inside our walls because of the balloon framing construction. You said that that can cause heat to be pulled out of the house with the draft going up inside the walls and should be re-mediated. You also said that the attic insulation was insufficient and that fiberglass batts can leave spaces for around the edges causing heat loss and that it should have blown in insulation on top of what was there to seal the whole attic and increase the r factor. After going over your findings and telling me how you would fix the problems you told me how I could do it myself with stuff from the Home Center and for a quarter of the cost. Well, I did. I went into the basement and filled the bottom of the wall joist with unfaced insulation where they set on the sill plate. I then cut one inch foam board the size for each space and set it in and the sealed the edges of that with expanding foam as well as the sill plate to the foundation. I also sealed the sill plate to the foundation where the joist ran along it, as well as the top of those joist where it made contact with the subflooring. Next I went to the home center and rented their blown insulation machine and got ten bales of the insulation. I filled the attic on top of the batt insulation with about six inches giving another r-19 factor on top of the r-19 that was there. You said that the blown in would also help seal the heat loss around the edges of the batt. The work in the basement cost $144.00 and the work in the attic cost $328.00. After the 30% federal energy tax credit it will end up costing me about $330.00, which you said I should recover in savings in the first year. Thank You for all your advice and expertise. You made me aware of things I should consider and did.