Text/HTML

Frequently Asked Questions - FAQs


Energy Related Tax Relief - Frequently Asked Questions (FAQs)

 Text/HTML

Other Energy Related Tax Relief


Corporation License Tax Deduction

An Energy Conservation Deduction for Corporations is available in lieu of the energy conservation installation credit. A corporation is allowed a deduction no greater than $1,800 for a residential building or $3,600 for a non-residential building in computing the net income for the capital investment in a building for an energy conservation purpose.

Property Tax Exemptions and Relief

The Non-Fossil Fuel Energy Generation Exemption provides an exemption from property assessment for qualifying non-fossil fuel energy generating systems installed in residential and commercial structures. The maximum exemption amount per year is $20,000 for residential property, and $100,000 for commercial property. The value of the qualifying non-fossil fuel energy generating system must be included in the assessed value of the property prior to its exemption.

If the system has been exempted by its non-inclusion in the assessed value of the property, no additional exemption will be granted. The exemption lasts for a period not to exceed 10 years from year of installation. The property owner must make application for exemption using Form AB-14. Application is required by March 1 following installation of system or within 30 days of receipt of assessment for the year the non-fossil fuel energy generating system is installed.


 Text/HTML

About 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 for their share of investments in the same building. For example, a married couple who jointly own their home may each claim a credit up to $500 or $1,000 for the couple if the investments were paid with joint funds or each spouse used their own funds.

Investments That Qualify for the Energy Conservation Credit

-Heat recovery ventilators (HRV) meeting the CSA C439-00 standard

-Heating and cooling systems that meet or exceed the following ratings:

- Split system central air conditioning with an EER greater than or equal to 13 and SEER greater than or equal to 16

- Package system central air conditioning with an EER greater than or equal to 12 and SEER greater than or equal to 14

- Split system air source heat pumps with an 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 with an EER greater than or equal to 12 and SEER greater than or equal to 14

- Natural gas or propane furnaces with an AFUE greater than or equal to 95

- Oil furnaces with an AFUE greater than or equal to 90

- Hot water boilers with an AFUE greater than or equal to 90

- Gas, oil, or propane water heaters with an 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

- Exterior windows and skylights with a U-factor less than or equal to 0.30 (*See note below)

- Storm windows with a U-factor less than or equal to 0.30 when measured in combination with the exterior window over which it is installed (*See note below)

- Exterior doors with a U-factor less than or equal to 0.30 (*See note below)

- Storm doors with a U-factor less than or equal to 0.30 when measured in combination with the exterior door over which it is installed (*See note below)

*Please note-for windows, skylights and doors installed after December 31, 2014 in new construction situations, only the amount spent to exceed the current International Energy Conservation Code with Montana amendments as adopted by the Montana Department of Labor and Industry is eligible for the credit

- 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

- 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
- 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

Investments Not Qualified for Energy Conservation Credit

In general, any investment for repairs or maintenance to a building or residence will not qualify. The following are examples of expenditures that will NOT qualify for the energy conservation installation credit. This list is not intended to be an all-inclusive list, but a guideline to assist you in determining if your investment qualifies.

-Installing carpet
-Re-shingling or repairing a roof
-Metal roofing with pigmented coating or asphalt roof with cooling granules
-Paint
-Replacing or repairing a failing foundation
-Siding
-Portable air conditioners
-Space heaters
-Insulating an unheated space
-Gas fireplaces and fireplace inserts
-Household appliances such as Energy Star stoves, washers, and dryers