Energy Efficiency Tax Credits (Personal)

July 15, 2022

Summary

In April 2008, Kentucky enacted legislation allowing a 30% state income tax credit for taxpayers who install certain energy efficiency measures on their principal residence or residential rental property. These energy efficiency measures include:

Qualified Energy Property Installation:* Water Heaters, Heat Pumps, Central Air Conditioners, Hot Water Boilers, Advanced Main Air Circulating Fans
Weatherization Measures: Windows and Storm Doors, Added Insulation

The tax credit may not exceed $100 for insulation, and $250 for qualified energy property, windows and storm doors. The total tax credit may not exceed $500 for any combination of qualified energy property and weatherization measures.

Kentucky also allows an $800 tax credit for taxpayers who build a new Energy Star home for use as a principal residence, but this credit may not be taken in addition to the energy efficiency tax credits describe in this summary.

See guidance issued by the Kentucky Department of Revenue for additional information.

In addition, Kentucky allows a 30% state income tax credit for taxpayers that install certain energy efficiency measures on commercial property (click here for more information).

These credits may be applied during taxable years 2009-2015. To claim the tax credit, use Form 5695-K - Kentucky Energy Efficiency Products Tax Credit - Form 41A720-S7 available on the Kentucky Department of Revenue website.

* "Qualified Energy Property" must meet the efficiency guidelines specified in the federal tax credit for residential energy property.

Program Overview

Implementing Sector:	State
Category:	Financial Incentive
State:	Kentucky
Incentive Type:	Personal Tax Credit
Web Site:
Administrator:	Kentucky Department of Revenue
Start Date:	1/1/2009
Eligible Renewable/Other Technologies:	Water Heaters Lighting Furnaces Boilers Heat pumps Air conditioners Building Insulation Windows Doors
Incentive Amount:	30% of installed cost
Maximum Incentive:	$500 maximum for all improvements. Technology caps are as follows: Insulation: $100; Windows and Storm Doors, Water Heater, Heat Pump, Air Conditioner, Advanced Main Air Circulating Fan: $250/unit
Equipment Requirements:	Attic Insulation: R-38 or higher Exterior Wall, Crawl Space, Basement Exterior Wall Insulation: R-13 or higher Floor Insulation: R-19 or higher Electric Heat Pump Water Heater: Must yield an energy factor of at least 2.0 in the standard DOE test procedure Split Central Air Conditioning System: SEER of 15, EER of 12.5 Packaged Central Air Conditioning Systems: SEER of 14, EER of 12 Natural Gas, Propane or Oil Water Heater: Energy factor of .80 or higher Natural Gas, Propane or Oil Furnace or Hot Water Boiler: Annual fuel utilization efficiency rate of at least 95
Carryover Provisions:	May be carried forward for one year

Incentives

This program has 3 incentives

Technologies:	Water Heaters, Lighting, Furnaces, Boilers, Heat pumps, Air conditioners, Building Insulation, Windows, Doors
Sectors:	Residential, Installers/Contractors, Multifamily Residential
Parameters:	The incentive has a minimum of 30.00 % of cost, The incentive has a minimum of $500.00

Technologies:	Building Insulation
Sectors:	Residential, Installers/Contractors, Multifamily Residential
Parameters:	The incentive has a minimum of $100.00

Technologies:	Water Heaters, Heat pumps, Air conditioners, Windows, Doors
Sectors:	Residential, Installers/Contractors, Multifamily Residential
Parameters:	The incentive is 250.00 $/Unit

Authorities

Name:	KRS § 141.435 et seq.
Effective Date:	1/1/2009
Expiration Date:	12/31/2015

Contact

Name:	Taxpayer Services
Organization:	Kentucky Department of Revenue
Address:	501 High Street Frankfort KY 40620
Phone:	(502) 564-4581

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.