Tax Credit Info for Energy Efficiency

By S. T., on February 19th, 2009

Federal Tax Credits for Energy Efficiency

How the new Stimulus bill affected the tax credits for energy efficient home improvements

This might read like an ad, but it’s actually more good news, which I know most of us are not used to seeing. If you are a homeowner, you probably qualify for most of the following, if you care to do the upgrades. 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. Since then they have moved fast to lay out all the details. I hope to take advantage of some of this myself. See below for a link to the chart. 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.

UPDATED February 18, 2009

See the Chart here! You must see the chart, it’s detailed – (click here)

Federal Tax Credits for Energy Efficiency includes:

**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.

Tax Credits for Consumers:

Home Improvements

Tax credits are now available for home improvements:

must be “placed in service” from January 1, 2009 through December 31, 20010
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)
for record keeping, save your receipts and the Manufacturer Certification Statement³, OR for windows, you can save the ENERGY STAR label from your new windows
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 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. More.