The State of Montana has an excellent program in place to recover up to 25% of expenses used to make your home (or other building) more energy efficient. It’s called the Energy Conservation Installation Credit and it’s available by filing Form ENRG-C with your Montana income tax return. The credit is applied against your income tax liability up to a maximum of $500. More than one person may each qualify for the credit as long as each person claiming the credit has ownership in the building. A common example is a married couple who both own a house, they could claim up to $500 each for a total of $1,000.
The Energy Conservation Installation Credit is a nonrefundable credit. A nonrefundable tax credit is one that can’t reduce the amount of tax owed to less than zero. If the credit were able to reduce the amount of tax owed to less than zero, the taxpayer would be entitled to a payment from the government, and would be called a refundable tax credit
According the the Montana Department of Revenue, the following items qualify for the credit:
- Insulation of floors, walls, ceilings and roofs in existing buildings
- Insulation in the floors, walls, ceilings and roofs of a new building, to the extent that it exceeds the current International Energy Conservation Code with Montana amendments as adopted by the Montana Department of Labor and Industry
- Insulation of heating and air conditioning pipes, insulation and sealing of heating, ventilation and air conditioning (HVAC) ducts, and insulation of hot water heaters and tanks
- Windows that result in a reduction of energy consumption
- Storm doors and insulated exterior doors
- Caulking and weather stripping of an existing structure
- Devices which limit the flow of hot water from shower heads and lavatories
- Heat recovery ventilators (HRV)
- Glass fireplace doors on existing fireplaces
- Exhaust fans to reduce air conditioning requirements
- Replacement of incandescent light fixtures with fixtures of a more efficient type such as those with electronic ballast and compact or linear fluorescent lamps and LED lights
- Lighting controls with cutoff switches to permit the selective use of lights
- Programmable thermostats
- Installation of new domestic water heaters, heating or cooling systems, so long as the new system uses energy more efficiently than the prior system
According the Department of Revenue, the following is a partial list of investments that do no qualify for the credit:
- Installing carpet
- Reshingling or repairing a roof
- Paint
- Replacing or repairing a failing foundation
- Siding with little or no insulation
- Portable air conditioners
- Space heaters
- Household appliances such as ENERGY STAR stoves, washers, dryers and refrigerators