Home Insulation

• Installing insulation in your home is the most effective way to prevent heat loss in the winter and heat gain in the summer. A radiant barrier is a form of home insulation specifically designed to decrease heat gain and make your home air conditioning units work more effectively so that they require less energy. As an energy efficient home improvement, radiant barriers are tax deductible as an energy efficient tax credit.
  
  

2010 Tax Credits

• If you placed a radiant barrier into service in your home during 2010, you could qualify for a tax deduction equal to 30 percent of up to $1,500 of the cost. You could not include the cost of installation for the barrier in your tax credit calculation however, just the purchase expense of the barrier itself. If you added a radiant barrier to your home in 2010 but did not claim the tax deduction, you can file a revised tax return to claim the credit.
  
  

2011 Tax Credits

• For the 2011 tax year, the IRS reduced the energy efficient tax credit. If you put a radiant barrier into service in your primary residence during the year, you can claim a tax credit equal to 10 percent of up to $500. The $500 total is for multiple years however, so if you previously claimed another energy efficiency tax credit since 2005 then your 2011 claim is reduced by the previous claim. As with the 2010 tax credit, you cannot include the cost of installation for the barrier on your claim form.
  
  

IRS Form 5695

• To claim your energy efficiency tax credit for a qualified radiant barrier in your home, you must fill out IRS form 5695 and return that with your form 1040 when you file your 2011 income tax return.