Can I claim the federal Energy Efficiency Tax Credit for Homeowners if I receive a tax refund for the year? -Jerry

Hi Jerry,

You may still be able to qualify for the federal Energy Efficiency Tax Credit, even if you receive a refund, as long as you don’t receive a total refund of all the federal income taxes you owed for the year. However, if you had no tax liability for the year, and you got everything you put in back, you would not be eligible for the Energy Efficiency Tax Credit. In other words, you can only claim the credit if you paid something toward it in federal income taxes for the year.

To see if you can benefit from the Energy Efficiency Tax Credit, subtract all of your deductions from the total amount of federal income tax you owe. If you come up with a positive number, meaning you paid federal taxes for the year, then you may be able to benefit from the tax credit.

That’s a little different from whether you received a refund or not. If you overpaid your taxes for the year, you would receive a refund, but you still could have paid more in than you got back, making you eligible for the tax credit.

For example, if you paid $10,000 in federal income taxes during the year, but ended up only owing $1,000 in taxes, you would receive a refund for $9,000 but still would have paid the federal government $1,000, so you would be eligible for an Energy Efficiency Tax Credit of up to $1,000 even though you got a refund.

On the other hand, if you paid in $10,000 in federal income taxes during the year, but after taking all your deductions (excluding the Energy Efficiency Tax Credit), you received a full refund of $10,000, then you wouldn’t be eligible for the tax credit.

Further Information

• Energy Efficiency Tax Credit for Homeowners (article)
• Windows & Doors that Qualify for the Energy Efficiency Tax Credit (video)
• How Can I Determine if I Can Collect the Tax Credit? (Energy Star)

Tags: , energy efficiency tax credit, federal government, tax refund