A Report From Oregon on Energy Efficiency Upgrades

Oregon continues to support saving energy and going green through State tax credits. State tax credits are available to homeowners that install a wide range of energy reducing measures. Everything from windows to furnaces to refrigerators to solar installations may qualify for a State tax credit.

Let’s discuss tax credits in Oregon. It may be the same for other States and it may not. In Oregon, a tax credit directly reduces the amount of tax you pay. As an example, at the end of the year, you have paid in $4,000 in State income taxes that has been withheld from your monthly pay check. You figure out your taxes at the end of the year and find that you will receive a refund of $500. But, you have a tax credit of $80 for installing a new energy efficient clothes washer. The result is that you pnow receive a refund of $580.

In speaking with people, I find many people believe the tax credit only reduces the amount of taxable income. So, if you earned $40,000 in taxable income for the year, you would take the tax credit off of the $40,000 for a taxable income of $39,920. This, of course, is not correct. The tax credit is much more valuable than just reducing taxable income. The tax credit is is a direct reduction in the taxes due.

Here’s a couple more things about Oregon Energy Tax Credits. You should visit www.oregon.gov to find a list of eligible tax credit measures. Just because the appliance person at your favorite big box store says the clothes washer you’re about to pay a small fortune for is energy efficient, it does not mean it will qualify for a tax credit. Appliances, such as washing machines and dishwashers need to meet the States requirement for EF rating. ( Energy Factor ) Every major appliance will have an EF rating. Oh ya, just because the appliance is Energy Star rated, it does not mean the appliance has a EF rating high enough to qualify for the State tax credit.

If you’re planning on claiming a tax credit for installing solar electric or solar hot water, you had better use a contractor that is listed on Oregon’s approved solar tax credit list. Again, check out the web site www.oregon.gov

Energy factor ( EF ) indicates the number of complete cycles an appliance will operate while using one kilowatt hour of electricity. The Energy Star requirement for a clothes washer is an EF of 1.18. The federal standard is an EF of 2.5.

Oregon has a State tax credit application available on line. Complete the application and attach proof of payment and appliance information to the application and mail to the Oregon Dept. of Energy. Oregon will mail you a tax credit card to send in with your State income tax forms.

Oh, by the way, you can claim an Oregon tax credit for the appliance cost, but not for the installation cost. Check it out.