OregonResidentialEnergy Tax Credit
OregonResidentialEnergy Tax Credit
Tax credits for… Premium efficiencyappliancesHeating, ventilation, airconditioning systems
Premium efficiencywater heaters
Hybrid vehicles Ground-source heat pumpsMaking electricity from thesun and wind
WHO CAN GET THE TAX CREDIT? Homeowners
Renters (If you own the appliance or system.)
Landlords (For solar and other renewable energysystems only. Use the Business Energy Tax Credit forother systems, equipment you plan to purchase for arental property.)
You must be an Oregon resident who owes Oregonincome taxes. (See section on “Pass-through Option”at the end of this brochure is you do not have anOregon tax liability.)
Look at the Oregon Department of Energy’s list ofqualifying equipment, systems, and services. Only
Install a new premium efficiency
appliance or furnace…
Seal your heating ducts…
Buy a new hybrid car…
Install a premium efficiency heat
pump or air conditioning system…
Heat with a ground-source
heat pump…
Make electricity from the sun…
…and get a crediton your state income taxes.
2
items eligible at the time of purchase qualify. Youmust be the owner of the eligible equipment and theequipment must be new (the original use must beginwith you).
The qualifying equipment must be used in the homeyou live in (your primary residence) or in yoursecondary (vacation) home. The home must be inOregon. Vehicles must be registered for use in Oregonto qualify for a tax credit.
HOW MUCH IS THE TAX CREDIT?The tax credit amount for a qualifying appliance orsystem is based on the energy saved. The maximumtax credit is the amount listed on the Oregon Depart-ment of Energy qualifying list or 25 percent of theeligible net purchase cost, whichever is less.
WHAT QUALIFIES FOR A TAX CREDIT?The following items qualify for Oregon’s ResidentialEnergy Tax Credit. (Please note: Appliances andequipment labeled as energy efficient by the federalEnergy Star™ program are not always eligible for thestate Residential Energy Tax Credit program. In mostcases, the state program has higher standards thanEnergy Star™ or incentive programs offered by theEnergy Trust of Oregon and utilities.)
3
Vehicles
Hybrid and Alternative Fuel VehiclesNew hybrid electric-gasoline vehicles qualify for atax credit. The original use must begin with you. Anelectric motor provides additional power while youdrive. A gasoline engine provides energy and helpsrecharge the battery. Most hybrid electric vehiclesqualify for both a $750 vehicle tax credit and a $750on-board charging system credit (for a total of $1,500).Please note: Some hybrid vehicles do not meet theminimum standards established for both tax credits andsome vehicles labeled as “hybrid” by the manufacturerdo not meet minimum standards of either tax credit.Check the Oregon Department of Energy Web site atwww.oregon.gov/energy.
New alternative fuel vehicles that use electricity,natural gas, E-85 (or higher) blend, methanol, propane,hydrogen and other fuels approved by the OregonDepartment of Energy qualify for a tax credit. The taxcredit for new alternative-fuel vehicles is based on theincremental difference between the base price of thealternative-fuel vehicle and the base price of the gaso-line-only version of the same make and model vehicle.The tax credit is 25 percent of the incremental difference or$750, whichever is less. New “flex-fuel” vehicles that runon either E-85 or gasoline are not eligible for a tax credit.
You can get a tax credit for converting a vehicle touse any of the qualified alternative fuels and get 25percent of the conversion cost up to $750.
4
AppliancesNew major household appliances certified by theOregon Department of Energy are eligible for atax credit:
Qualifying clothes washers, dishwashers andrefrigerators.
Qualifying water heaters such as tanklessnatural gas or propane water heaters (also calledinstantaneous, on-demand or point-of-use) andelectric heat pump water heaters. Conventionaltank-type water heaters are not efficient enoughto qualify for a tax credit.
Qualifying wastewater heat recovery systemsthat use the waste heat from showers andother uses.
Qualifying heat recovery and energy recoverywhole-house ventilation systems that providebalanced ventilation.
The tax credit for appliances is the amount listed forqualifying models or 25 percent of the net purchaseprice, whichever isless. (Please note:shipping anddelivery charges,installation andspace modificationcosts are notincluded in the netpurchase price.)
The list of eligibleappliances changes asmanufacturers addnew products andthe Oregon Depart-ment of Energy raises eligibility standards. A current listby manufacturer and model is available from applianceretailers or on the Oregon Department of Energy Website (www.oregon.gov/energy) or call (toll-free inOregon) 1-800-221-8035.
5
Heating & Cooling
Photo courtesy of The Energy Conservatory
PremiumEfficiencyDuct SystemsGaps, leaks andholes in heatingand coolingductwork accountfor as much as 25percent of homeheat (or cooling)loss. You can get atax credit for a
well-designed and sealed duct system in your newhome or for sealing ductwork in your existing home.The tax credit is 25 percent of the eligible cost, up to$250. The technician performing the work must betax-credit certified by the Oregon Department ofEnergy. The list of tax-credit certified duct techniciansis available on the Department of Energy Web site(www.oregon.gov/energy) or by calling 1-800-221-8035.
Heat Pumps andAir Conditioning SystemsPurchasing a premium efficiency heat pump or airconditioning system and having it installed by adiagnostic technician tax-credit certified by the
6
Oregon Department of Energy can earn you a taxcredit. The amount of the tax credit depends upon theefficiency of the system you install. You may earn anadditional $150 tax credit for having your ductssealed by a tax-credit certified duct technician at thesame time you have a new heating system installed.
You can also get a tax credit for having yourcurrent heat pump or air conditioning systemserviced and tested for optimal performance by atax-credit certified diagnostic technician. The taxcredit is 25 percent of the cost or $250, whicheveris less. The list of tax-credit certified diagnostictechnicians is available on the Oregon Departmentof Energy Web site (www.oregon.gov/energy) orby calling 1-800-221-8035.
CondensingFurnaces,Boilers andAir HandlersPurchasing apremium effi-ciency furnace,boiler or airhandler canqualify for a taxcredit. You donot need to use atechnician tax-credit certified bythe Oregon Department of Energy to qualify forthe tax credit. The list of qualifying models isavailable on the Oregon Department of EnergyWeb site (www.oregon.gov/energy) or by calling1-800-221-8035.
7
Solar & WindSolar Water HeatingSolar water heating systems with OG-300 certificationare eligible for a tax credit of 60 cents per equivalentkWh saved in the first year, up to $1,500. Solar waterheating systems must be verified by a tax-creditcertified solar thermal technician. The tax credit forqualifying solar pool or spa heating systems is 15cents per kWh saved. Pools and spas do not requireverification of a tax-credit certified technician.
Solar Space HeatingHomes designed to heat with sun from south-facingwindows or solar collectors used for space heating areeligible for a tax credit of up to $1,500. The tax credit isbased on estimated system savings. Contact the OregonDepartment of Energy for minimum design standards.
Photovoltaic SystemsPhotovoltaic (PV) systems make electricity from thesun and get a tax credit of up to $6,000 to be takenover a four-year period ($1,500 per year). A tax-creditcertified solar PV technician must verify the systemfor a resident to qualify for a tax credit. For a list ofOregon Department of Energy tax-credit certified solartechnicians, visit our Web site www.oregon.gov/energyor call 1-800-221-8035.
8
Fuel Cells
Ground-Source Heat Pumps
Wind SystemsWind systems are eligible for a tax credit of 60 cents perestimated kWh saved in the first year, up to $1,500.Qualifying costs include wind measuring equipment,turbines, towers, associated components, engineeringcosts, utility interconnection equipment and installation.
Closed-loop ground-source heat pumps for spaceheating are eligible for a tax credit. Earth-coupled heatpumps and systems that use a secondary heat exchangersubmerged in a well, lake, pond or stream also qualify.(Systems that pump water directly out of a well, lake,pond or stream are not eligible.) Systems must beinstalled by a tax-credit certified geothermal technician.(See the Oregon Department of Energy Web site atwww.oregon.gov/energy or call 1-800-221-8035.) Thecredit is 60 cents per equivalent kWh saved in the firstyear, up to $900.
Fuel cells take hydrogen from a fuel and combine it withoxygen producing electricity, space heat and hot water.Fuel cells are not yet available, but are expected to enterthe residential market soon. You can use fuel cells tomake electricity and heat your home and water. Fuelcells qualify for a tax credit of 60 cent per equivalentkWh saved during the first year, up to $1,500.
9
TAX CREDITSA Residential Energy Tax Credit allows an Oregonresident to deduct that amount dollar-for-dollar againsttaxes owed on the Oregon income tax filings. Anyunused portion can be carried forward for up to fiveyears. (It is not a rebate and you will not receive cashback if your tax credit is more than your tax liability.See Pass-through Option below for more information.)
Oregon residents are allowed a maximum of :
$1,000 in tax credits for qualifying appliancesand heating and cooling equipment and servicesinstalled per residence per year;
$1,500 for qualifying solar photovoltaic (solarelectric) systems per residence per year;
$1,500 for qualifying renewable resourceinstallations per residence per year; and
$1,500 for qualifying hybrid and alternative fuelvehicles per vehicle.
HOW DO I APPLY FOR THE TAX CREDIT?Complete and sign the appropriate tax credit applica-tion for the system, equipment or service you buy.Forms and instructions are available from your retailer,contractor or technician or the Oregon Department ofEnergy. If you buy or have your heat pump or airconditioning system serviced, buy or have your ductssealed, or buy a solar system, your technician providesthe forms and can help you complete them.
Send the application to the Oregon Department ofEnergy with your receipt or other proof of payment.You’ll receive a certificate with the tax credit amountyou qualify for. Don’t wait to apply until tax season asyour request may be delayed for several weeks due tothe volume of applications.
Claim the tax credit when you file your Oregonincome tax return. Keep your certificate, a copy ofyour application, proof of payment and any othersupporting documentation. Do not attach this docu-mentation to your tax return. If your return is audited,the Oregon Department of Revenue will requestcopies of the information from you. If you havequestions concerning claiming the credit on your
10
625 Marion St. N.E., Salem, OR 97301-3737(503) 378-4040 • Toll-free: 1-800-221-8035
Fax: (503) 373-7806 • www.oregon.gov/energy
QualifiedTAX CREDIT
Oregon
Oregon tax return, contact the Oregon Departmentof Revenue at 1-800-356-4222 or 503-378-4988.
WHAT IS THE PASS-THROUGH OPTION?The Pass-through Option will allow an Oregon residentto transfer an energy tax credit to an individual orbusiness with an Oregon tax liability in exchange for alump-sum payment based on a percentage of thecertified tax credit amount. To use this option, completethe appropriate tax credit application form first. Yourapplication will be reviewed for eligibility.
A Pass-through Option Application will be sent toyou in return. You and your pass-through partner (thetax credit recipient) will complete and sign the Pass-through Option application and mail it to the OregonDepartment of Energy. You are responsible for findingyour own pass-through partner (must be a full-timeOregon resident or business with Oregon tax liability).
The Oregon Department of Energy will then issuethe tax credit certificate to the pass-through partner andthe partner will pay you the amount specified. For taxcredits up to $1,500, the payment amount is 95 percentof the tax credit amount. For photovoltaic (solarelectric) tax credits that are more than $1,500, thepayment amount will be 80 percent if the partner is abusiness and 86 percent if a resident. There may be taximplications for the pass-through partner. We advise youto consult with your tax preparer.
11
625 Marion St. N.E., Salem, OR 97301-3737(503) 378-4040 • Toll-free: 1-800-221-8035
Fax: (503) 373-7806 • www.oregon.gov/energy
Funding for this brochure was made possible by theU.S. Department of Energy, State Energy Program,
Grant No. DE-FG26-05R021612.
08/06 ODOE CF-108
