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Federal
Tax Credits for Energy Efficiency
How
has the new Stimulus bill affected the tax credits for energy efficient
home
improvements?
On
February 17, 2009, President
Obama signed a stimulus bill (The American Recovery and Reinvestment
Act of
2009) that made some significant changes to the energy efficiency tax
credits.
The highlights are:
- The
tax credits that were previously effective for 2009, have been extended
to 2010 as well.
- The
tax credit has been raised from 10% to 30%.
- The
tax credits that were for a specific dollar amount (ex $300 for a CAC),
have been converted to 30% of the cost.
- The
maximum credit has been raised from $500 to $1500 for the two years
(2009–2010). However, some improvements such as geothermal heat pumps,
solar water heaters, and solar panels are not subject to the $1,500
maximum.
- The
$200 cap on windows has been removed.
Federal
Tax Credits for Energy Efficiency includes:
- Tax
Credits for Consumers
- Tax
credits are available at 30% of the cost, up to $1,500, in 2009 &
2010 (for existing homes only) for:
- Windows and Doors
- Exterior
Windows & Skylights
- Storm
Windows
- Exterior
Doors
- Storm
Doors
- Insulation
- Garage
Doors
- Roofs
- HVAC
- Central
A/C
- Air
Source Heat Pumps
- Natural
Gas or Propane furnance
- Oil
Furnace
- Water
Heaters (non-solar)
- Biomass
Stoves
- Tax
credits are available at 30% of the cost, with no upper limit through
2016 (for existing homes & new construction) for:
- Geothermal
Heat Pumps
- Solar
Panels
- Solar
Water Heaters
- Small
Wind Energy Systems
- Fuel
Cells
How has the new Stimulus bill
affected the tax credits for energy efficient
home improvements?
On February 17, 2009, President
Obama signed a stimulus bill (The American
Recovery and Reinvestment Act of 2009) that made some significant
changes to
the energy efficiency tax credits. The highlights are:
- The tax credits that were previously
effective for 2009, have been extended to 2010 as well.
- The tax credit has been raised from 10%
to 30%.
- The tax credits that were for a specific
dollar amount (ex $300 for a CAC), have been converted to 30% of the
cost.
- The maximum credit has been raised from
$500 to $1500 for the two years (2009–2010). However, some improvements
such as geothermal heat pumps, solar water heaters, and solar panels
are not subject to the $1,500 maximum.
- The $200 cap on windows has been removed.
**Please note, not all ENERGY
STAR qualified homes and products qualify for
a tax credit. These tax credits are available for a number of products
at the
highest efficiency levels, which typically cost much more than standard
products.
If, for whatever reason, you decide not to purchase a product covered
by the
tax credit, you may still consider purchasing an ENERGY STAR product.
ENERGY
STAR distinguishes energy efficient products which, although they may
cost more
to purchase than standard models, will pay you back in lower energy
bills
within a reasonable amount of time, without a tax credit.
Home Improvements:
Tax credits are now available
for home improvements:
- must be "placed in service" from January
1, 2009 through December 31, 2010
- must be for taxpayers principal residence
- maximum amount is $1,500 in 2009 &
2010 for most home improvements (geothermal heat pumps, solar water
heaters, solar panels, fuel cells, and windmills are not subject to
this cap, and are in effect through 2016)
- must have a Manufacturer Certification
Statement3 to qualify
- for record keeping, save your receipts
and the Manufacturer Certification Statement3
- improvements made in 2009 will be claimed
on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695
(2009 version) — it will be available late 2009 or early 2010
- If you are building a new home, you can
qualify for the tax credit for geothermal heat pumps, photovoltaics,
solar water heaters, small wind systems and fuel cells, but not the tax credits
for windows, doors,
insulation, roofs, HVAC, or non-solar water heaters.
Source: energystar.gov
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