Energy Related Tax Relief
The following information is provided to assist you in understanding the Energy Conservation Installation Credit as well as other energy credits and incentives.
Energy Conservation Installation Credit
Other Energy Related Tax Relief
Energy Related Tax Relief Frequently Asked Questions
Energy Conservation Installation Credit
The Department of Revenue encourages citizens to weatherize their homes and take advantage of the Energy Conservation Installation Credit when individual income tax returns are filed.
The credit is applied against a taxpayer's income tax liability. Montana resident individuals can claim the credit for energy conservation investments made to a home or other building. The credit is equal to 25% of expenses, up to a maximum credit of $500. Two or more people may each qualify for the credit, as long as the building in which the investment is made is owned by all of the people claiming the credit. For example, a married couple who jointly own their home may each claim a credit up to $500 each or $1,000 for the couple.
The following investments qualify for the energy conservation credit:
- Heat recovery ventilators (HRV) **(See note below)
- Glass fireplace doors on existing conventional fireplaces
- Exhaust fans to reduce air conditioning requirements
- Replacement of incandescent light fixtures with fixtures of a more efficient type such as those with electronic ballast and compact or linear fluorescent lamps and LED lights
- Lighting controls with cutoff switches to permit the selective use of lights
- Programmable thermostats
- Installation of new domestic water heaters, heating or cooling systems, so long as the new system uses energy more efficiently than the prior system **(See note below)
- Insulation of floors, walls, ceilings and roofs in existing buildings
- Insulation in the floors, walls, ceilings and roofs of a new building, to the extent that it exceeds the current International Energy Conservation Code with Montana amendments as adopted by the Montana Department of Labor and Industry
- Insulation of heating and air conditioning pipes, insulation and sealing of heating, ventilation and air conditioning (HVAC) ducts, and insulation of hot water heaters and tanks
- Windows that result in a reduction of energy consumption **(See note below)
- Storm doors and insulated exterior doors **(See note below)
- Caulking and weather stripping of an existing structure (except when it is a standard component in the construction or maintenance of the structure such as the chinking and caulking in a log home)
- Devices which limit the flow of hot water from shower heads and lavatories
**Please note - If any of the indicated items were installed after June 30, 2010 either in an existing building or while constructing a new building, the following applicable specification must be met or exceeded in order for the investment to qualify for the credit:
|
Type of Investment |
Specification to qualify for the credit |
|
Exterior windows and skylights |
U-factor less than or equal to 0.30 |
|
Storm windows |
U-factor less than or equal to 0.30 when measured in combination with the exterior window over which it is installed |
|
Exterior doors |
U-factor less than or equal to 0.30 |
|
Storm doors |
U-factor less than or equal to 0.30 when measured in combination with the wood door over which it is installed |
|
Split system central air conditioning |
EER greater than or equal to 13 and SEER greater than or equal to 16 |
|
Package system central air conditioning |
EER greater than or equal to 12 and SEER greater than or equal to 14 |
|
Split system air source heat pumps |
HSPF greater than or equal to 8.5, EER greater than or equal to 12.5 and SEER greater than or equal to 15 |
|
Package system air source heat pumps |
HSPF greater than or equal to 8, EER greater than or equal to 12.5 and SEER greater than or equal to 14 |
|
Natural gas or propane furnace |
AFUE greater than or equal to 95 |
|
Oil furnace |
AFUE greater than or equal to 90 |
|
Hot water boiler |
AFUE greater than or equal to 90 |
|
Advanced main air circulating fan |
no more than 2% of total energy use |
|
Heat recovery ventilators |
CSA C439-00 standard |
|
Gas, oil, or propane water heater |
energy factor greater than or equal to 0.82 or thermal efficiency of at least 90% |
|
Electric heat pump water heater |
energy factor greater than or equal to 2.0 |
Examples of improvements that do NOT qualify
If you qualify for this credit, you will need to complete Form ENRG-C and attach it when you file your individual income tax return. Qualifying expenditures purchased and installed in 2012 can be reported as a credit on your 2012 individual income tax return. Please include Form ENRG-C.
Other Energy Related Tax Relief
Information on other energy credits and incentives, including the Alternative Energy Systems Credit and the Geothermal Systems Credit.
Warm Hearts/Warm Homes
Information regarding the Governor’s Warm Hearts Warm Homes initiative, including how you can get help for paying your energy bill and what can you do to save energy in your home.
Montana Department of Environmental Quality - Energize Montana
Administrative Rules: Please note that the effective dates for the administrative rules vary.
Sub-chapter 1 - Individual - Tax Credits for Alternative Energy Systems
Sub-chapter 2 - Individual - Energy Conservation Installation Credit
For personal assistance or more information, please call us toll-free at (866) 859-2254 (in Helena 444-6900).
Last updated 12/28/2012 1:30:13 PM