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Energy Conservation Tax Incentives

Many home and small business energy investments are eligible for state and federal tax incentives. And some utilities offer rebates for certain energy upgrades. And of course the present is always a good time to invest in energy conservation and renewable energy.

Most incentives are in the form of tax credits. Qualifying investments must be placed in service during the year the credit is claimed. The 2009 and 2010 tax years offered a window of opportunity for many of the federal credits. However, most of the federal conservation credits have been significantly reduced for tax year 2012.

Certain investments in renewable energy projects remain more expansive, however, with uncapped credits for federal taxes. And, of course, all credits are subtracted from net taxes owed.

For the 2012 tax year, the Montana state credit remains at 25 percent of eligible investments, up to $500 per taxpayer. The Montana credit can be claimed each year that eligible improvements are completed.

These fact sheets have been prepared to offer information and resources for specific investment areas and are for those filing based on investments made in the 2012 tax year. 

Federal energy conservation tax credit note: There is a lifetime limit of $500 for all years after 2005. If you have taken energy conservation tax credits in previous years of $500 or more, you cannot claim additional credits for tax year 2012. The maximum limit claimed for windows cannot exceed $200; for qualified natural gas, propane, or oil furnaces or hot water boiler, the credit cannot exceed $150; for qualified domestic hot water heaters, electric heat pumps, and qualified central air conditioners the credit cannot exceed $300.

Energy Efficiency Tax Credit Fact Sheets

For More Information on Tax Incentives

Utility Incentive Information

Federal Tax Incentives