If your home is leaking hot and cold air, the federal government will pay you to add insulation to reduce or prevent the leakage. You can take a tax credit for insulation added to your home for up to 10 percent of the cost, with a maximum credit of $500. A tax credit is a dollar-for-dollar reduction of your tax bill. It is, in effect, a discount on the cost of your insulation.What QualifiesAlmost any type of insulation that saves energy will qualify for the tax credit. There are many types of insulation, each suitable for a specific purpose. It can be in the form of rolls, flat pieces (batts), loose pieces, sprays and other types. It can be made of a variety of materials, the most common of which is fiberglass. Products that stop air leaks, such as weather stripping may also qualify if the manufacturer certifies its effectiveness. What doesn’t qualify is the cost of installation, and you have to decide whether you have the do-it-yourself skills to choose the right insulation and install it properly.How to ApplyTo qualify for the tax credit in 2011, the insulation must be installed and ready for use by 12/31/2011 (the IRS term is “placed in service”). Merely buying and paying for the insulation will not qualify. You apply for the tax credit by attaching form 5695 to your 2011 federal income tax return. You need not include any invoices or manufacturer’s certifications with the form, but you should keep them for your records should any question arise in the future.Principal ResidenceThe insulation will qualify for the tax credit if it is installed in your main home. Second homes and rental units do not qualify. However, your main home can be a boat, a condominium, a trailer or any other dwelling located in the U.S., where most of your time is spent.If you live in the Broken Arrow/Tulsa area, and you need more advice, let one of our trained technicians help you. Contact us at Air Assurance.Our goal is to help educate our customers about energy and home comfort issues (specific to HVAC systems). Air Assurance services Tulsa, Broken Arrow and the surrounding areas. Visit our website to see our current promotions and get started today!