• Under a program entitled Federal Tax Credits for Consumer Energy Efficiency, the federal government offers homeowners the chance to receive a credit on their federal taxes to compensate them for the purchase and installation of energy-efficiency products. The program sparks a number of common questions related to eligibility and the process of claiming the credit. Note that, as of October 2010, the energy-saving tax credits are set to expire Dec. 31, 2010.
  
  

What's Included In The Credit?

• Two main credits are available: the energy-saving credit and the energy-efficient property credit. Under the energy-saving credit, you can claim energy-efficient additions to your home, such as energy-efficient biomass stoves, roofs, windows and water heaters, for credit. Each item must meet criteria established by the 2000 International Energy Conservation code; a complete list is available on the Energy Star site (see Resources). Under the energy-efficient property credit, the homeowner receives credit for installing energy-producing devices, such as wind turbines, solar energy systems and residential fuel cells.
  
  

How Much Can I Claim?

• For the energy-saving credit, the filer can claim up to 30 percent of the cost of purchasing and installing the devices, with a maximum claim of $1,500. However, for the energy-efficient property credit, homeowners can claim 30 percent of the cost with no upper limit. For fuel cells specifically, the filer can claim 30 percent of the cost, with up to $500 per half-kilowatt of power capacity.
  
  

How Do I Claim My Credit?

• When filing your annual tax return, complete Internal Revenue Service (IRS) Form 5695 (see Resources), and return it with your income tax form. Plan to keep all receipts and other documentation proving that you purchased the equipment cited on your form. You do not, however, have to mail in these documents unless the IRS specifically requests them.
  
  

Are There Any Additional Requirements?

• According to 1040.com, those seeking tax credits must meet several additional requirements. For the energy-saving credit, each item must be installed in a person's primary home. This is defined as the place the person lives most of the time and can include a house, mobile home, condominium, cooperative apartment or houseboat. Also, all expenses must be paid during the current tax year. Improvements from a previous year cannot be claimed. Newly constructed homes qualify only for the energy-efficient property credit.