They have a lot to do before they come back next year.

Hybrids generally get better mileage in city driving than in highway driving. Energy-efficient refrigerators, clothes washers, and dishwashers. There is no credit for other kinds of electric water heaters. In addition, any excess unused credit cannot be carried over to another year. All the improvements must be installed in or on the taxpayer’s principal residence in the United States.

Individuals subject to the alternative minimum tax AMT need to know that this credit will not reduce their AMT. Who gets it? Individuals who install specific energy-efficient home improvements. This is about 20 percent more efficient than the current federal standard. Condo and co-op improvements are apportioned to the owners. Allows credits for purchases of advanced main air circulating fans, natural gas, propane, or oil furnaces or hot water boilers and other qualified energy efficient equipment.

Fuel savings are calculated as 120,000 miles divided by baseline mpg minus 120,000 miles divided by vehicle mpg. Only some tankless water heaters currently reach this efficiency level. The credit is non-refundable, so while it can potentially reduce your income tax liability to zero, it cannot go below.