Congress has extended the energy efficiency tax credits for most homeowners through the end of 2010. If you’ve been looking to upgrade your windows and doors, air conditioner system, water heater and other appliances, you may qualify for a tax credit. In fact, some tax credits for home improvements will be available until 2016.
- If you purchase an energy-efficient product for your home, you may be eligible for a federal tax credit. Not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products. They may cost more to purchase than standard models, but will save you money in energy bills within a reasonable period of time – with or without a tax credit.
How much is the tax credit? The credit is 30% of cost of the home improvement, up to $1,500. It expires on December 31, 2010
Improvements must be made on an existing home that is your principal residence. New construction homes and rental properties are not eligible.
How does the tax credit work? For a qualifying upgrade, the tax credit is 30% of the covered cost up to a $1500 total credit. For example, if you pay $3000 for a central air conditioning system (excluding installation costs), your credit would be $900. It mujst be purchased and paid for by December 31, 2010.
You can read details about upgrades at the government site.
What products are eligible for the energy efficiency tax credit?
Many different products are eligible for the tax credit. But, you must be careful that your specific product is eligible. Some of the products include:
- Energy efficient doors and windows. Installation costs are not eligible for the credit.
- Water Heaters. Credit includes installation costs.
- HVAC components, including advanced air handlers, air force heat pumps, central A/C units, boilers, propane, and gas furnaces. Tax credits include installation costs.
- Insulation, including spray foam, fiberglass, or blow-in cellulose - must meet IECC requirements. Installation costs not covered.
- Biomass Stoves.
- Metal and asphalt roofs. Credit doesn’t include installation costs.
As you can see, some of the tax credits will include installation costs. To find out if your product is a part of the credit, and whether you can include installation costs, check out the government website.
How do I claim the credit?
To get the energy efficient products tax credit, claim the credit on your 2010 taxes. Include IRS Tax Form 5695 with your tax return.
To find out more information about energy efficiency improvements, click here.
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