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Energy Related Tax Relief

The following information is provided to assist you in understanding the Energy Conservation Installation Credit as well as other energy credits and incentives.

Energy Conservation Installation Credit

The Department of Revenue encourages citizens to weatherize their homes and take advantage of the Energy Conservation Installation Credit when individual income tax returns are filed.

The credit is applied against a taxpayer's income tax liability.  Montana resident individuals can claim the credit for energy conservation investments made to a home or other building.  The credit is equal to 25% of expenses, up to a maximum credit of $500.  Two or more people may each qualify for the credit, as long as the building in which the investment is made is owned by all of the people claiming the credit.  For example, a married couple who jointly own their home may each claim a credit up to $500 each or $1,000 for the couple.

The following investments qualify for the energy conservation credit:

  • Insulation in existing buildings of floors, walls, ceilings, and roofs
  • Insulation of pipes and ducts located in nonheated areas and insulation of hot-water heaters and tanks
  • Windows that result in reduction of energy consumption
  • Insulated exterior doors
  • Caulking and weather stripping
  • Devices which limit the flow of hot-water from shower heads and lavatories
  • Heat recovery ventilators
  • Glass fireplace doors
  • Caulking and weather stripping of an existing structure
  • Insulating exterior doors of an existing structure
  • Installing glass fireplace doors on existing fireplaces
  • Installing a programmable thermostat
  • Replacing incandescent light fixtures with light fixtures of a more efficient type, such as those with electronic ballast and compact or linear fluorescent lamps
  • Installing lighting controls with cut-off switches that permit the selective use of lights
  • The installation of devices that limit the flow of hot water from shower heads and lavatories
  • Insulation in the floors, walls, ceilings and roofs of a new building to the extent exceeds the requirements of the 2003 International Energy Conservation Code (IECC) with Montana amendments
  • Installing storm windows or storm doors to existing structures
  • Installing exhaust fans to reduce air conditioning requirements
  • Installation and replacement of domestic water heaters, heating or cooling system in a building so long as the new system uses energy more efficiently than the previous system.

For examples of improvements that do NOT qualify, click here.

If you qualify for this credit, you will need to complete Form ENRG-C and attach it when you file your individual income tax return. Qualifying expenditures purchased and installed in 2008 can be reported as a credit on your 2008 individual income tax return. The 2008 Form ENRG-C will be available soon. If you would like to review the 2007 Form ENRG-C, click here.

Other Energy Related Tax Relief

For information on other energy credits and incentives, including the Alternative Energy Systems Credit and the Geothermal Systems Credit, click here.

Warm Hearts/Warm Homes

For information regarding the Governor’s Warm Hearts Warm Homes initiative, including how you can get help for paying your energy bill and what can you do to save energy in your home, click here.

For personal assistance or more information, please call us toll-free at (866) 859-2254 (in Helena 444-6900).