Are My Colorado Home Energy Efficiency Improvements Tax Deductible?


If you are thinking about making energy efficiency home improvements or if you have recently made them, you could find more than one financial advantage to the work you do.

While the improvements you make will certainly save you on your utility bills, they could also save you on your tax bills.

Non-business energy property credit

The Federal government offers a tax credit, which means you will get the money back from the IRS even if you don’t pay a lot in taxes to begin with, for home energy efficiency improvements.

In most cases, homeowners can get a credit of up to 10 percent of the purchase price of the following items if they were purchased for the purpose of increasing your home’s energy efficiency:

  • Circulating fan
  • Hot water heater
  • Furnace
  • Central air conditioning systems
  • Exterior doors
  • Windows and skylights
  • Insulation
  • Heat pumps
  • Naturally cooling roofs


The tax credit is great. But if you’re doing a lot to your home, it’s good to know that the credit is limited to $500 total, not per year. That means any improvements you have made since 2005 will count toward that credit limit.

The limit for windows is $200 for the same period since 2005.

The improvements must also be made at your primary residence.


ERC and tax advantages

If you get an energy audit through the Energy Resource Center, it’s not tax deductible. But a donation to our 501C3 is a great way to help other Colorado families live in more energy efficient housing while also gaining a tax deduction.


Find out more

The Energy Resource Center can perform a home energy audit and help you identify the improvements you can make that will have the fastest return on in investment, factoring in the tax credits.

If you cannot afford an energy audit, or are unable to pay for the recommended improvements, you might qualify for a free audit and home winterization from ERC. We serve families living in 11 counties.


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