DOE, ASE Provide Information on Energy Efficiency Tax Credits

November 23, 2005

DOE and the Alliance to Save Energy (ASE) have compiled Web-based information on how consumers can reduce their federal income taxes in 2006 and 2007 by making their homes more energy efficient and purchasing fuel-efficient vehicles. Under the Energy Policy Act of 2005, consumers can save up to $500 in taxes in 2006 and 2007 by installing certain energy-efficiency upgrades to existing homes. In addition, consumers and businesses can save up to $3,400 on taxes by buying energy-efficient hybrid-electric or diesel vehicles. Although the Internal Revenue Service (IRS) has not yet issued specific guidance for consumers on how to claim the income tax credits, the ASE Web pages offer the latest information based on the new energy law. The Web pages will be updated on a continuing basis as the IRS makes new details available. See the ASE press release and Web page.

DOE and ASE are also part of the Tax Incentives Assistance Project (TIAP), which has launched a separate Web site to give consumers and businesses additional information about tax incentives for energy efficiency products and technologies. TIAP is sponsored by a coalition of public interest nonprofit groups, government agencies, and other organizations in the energy efficiency field. See the ASE press release and the TIAP Web site.

States may also offer tax incentives and funds for energy efficiency improvements, which can usually be combined with federal tax credits to yield significant savings. ASE's new State Energy Efficiency Index can help consumers and businesses find out about the energy efficiency policies in their state. In addition to tax credits and funds, the site lists appliance standards, building codes, transportation initiatives, other relevant legislation, and cap and trade programs for air emissions. See the ASE's State Energy Efficiency Index.