Energy-Efficient Appliances and Tax Deduction

The purchase and use of energy-efficient appliances will garner tax rebates of up to 30 percent of the appliance cost. Federal tax rebates for such appliances are available to both homeowners and renters alike. However, filling out a federal rebate form is required in order to receive the energy efficiency rebates.

The U.S. Department of Energy offers federal tax rebates for qualifying energy-efficient appliances. Both residential and commercial business purchases qualify individuals for the energy tax deductions. A per dollar matching figure rebate allows up to 30 percent of energy-efficient appliance purchases. Some states also allow energy efficiency credits be calculated against standard utility bills. States, which offer such programs, will detail the guidelines and restrictions in the annual state income tax packet. Home improvements, such as appliance purchases, roofing repair and installation, heating and cooling systems, insulation and window replacement, qualify for the federal energy efficiency tax rebates. Homeowners or businesses with solar electrical systems also qualify under the current federal energy efficiency rebate program.The U.S. Department of Energy website offers complete details and necessary forms regarding the rebates.

Air Source Heat Pump systems qualify for up to $1,500 for both split and package system appliances. Propane furnaces and natural gas heating systems also qualify for the energy efficiency rebate for up to 30 percent of the system cost. A cap of $1,500 is placed on the federal rebate tax amount. Oil furnace systems can also earn an energy efficiency tax rebate. Qualifications for Energy Star oil furnace are marked on the product sales tag and viewable from the Energy Star website. Advanced main circulating fans produced by Energy Star earn a 2 percent energy efficiency rebate. Home improvement stores, along with heating and cooling companies can provide detailed information describing the tax rebate guidelines for potential customers.

Washing machines and clothes dryers that meet the minimum energy efficiency standards also qualify for the tax rebate. The cost of these types of washing machines can be higher than standard machines, but will also lower the monthly utility bill. Clothes washing and drying machines featuring an Energy Star symbol, will qualify for the up to $30 of appliance cost rebate. Air conditioning window units and central air-cooling systems, which are designed to be energy-efficient, will qualify for the federal tax rebate. Buyers should read all appliance tags carefully. Look for the Energy Star symbol and ranking of the appliances before purchase. Stoves and refrigerators, which are deemed energy-efficient, will also earn a federal energy efficient rebate. Purchasing an energy-efficient appliance doesn't mean consumers will have to skimp on style or design. A multitude of appliances colors, styles and size options are available with the Energy Star symbol.

In addition to the federal tax rebate, consumers can also complete a state rebate form for qualifying energy-efficient appliances. To qualify for a rebate in most states, the appliance purchase has a price tag of at least $60. Typical state rebate amounts for energy-efficient appliances range from $25 to $75 per appliance. Clothing washers and electric hot water qualifying appliances earn buyers a $75 tax credit on average. Appliances, such as freezers, refrigerators, dishwashers and propane hot water heaters, will garner an approximate $25 state tax refund.

Solar energy water heating systems where a minimum of half the home energy is originated from the system qualify for the federal tax credit. The use of solar heated water in swimming pools and hot tubs can't be factored into the percentage of qualifying home use. Biomass stoves with at least a 75 percent thermal energy rating will qualify for the tax rebate, and lower standard heating bills. Biomass fuel is required for use inside the stove. Photovoltaic electrical systems can qualify for the tax rebate, providing such use doesn't violate any local electrical or fire codes.