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Energy Tax Credit

Categories: Tax, Econ

You get a child tax credit for having kids. So...do you get the energy tax credit for using energy? Like, a tax refund for burning piles of coal in your backyard?

Eh...no. More like the opposite. The energy tax credit provides a tax benefit for not using energy, or at least taking steps to use energy more efficiently. If you upgrade your house with equipment that's more energy-efficient (add insulation, put in a propane water heater or furnace, install solar panels on our outdoor toilet, etc.), you can deduct a certain amount of the cost from your taxes.

There are also tax credits for more aggressive energy-related upgrades, if you don't mind being known as the "wind-turbine person" around the neighborhood. They include wind turbines, of course, but also things like solar panels or fuel cells.

Find other enlightening terms in Shmoop Finance Genius Bar(f)