U.S. homeowners can lower home energy bills, lower federal income taxes and increase home comfort by making energy efficiency home improvements that qualify for up to $1,500 in federal income tax credits.
Consumers who make energy-efficient upgrades can also reduce their personal carbon footprint because using less energy at home means emitting less pollution too.
The federal income tax credits for specific home improvements are available now through 2010, thanks to the American Recovery and Reinvestment Act (ARRA) of 2009.
While the tax credits are similar to those in effect a few years ago, consumers should be aware of some changes, according to Steve Nadel, executive director of the American Council for an Energy-Efficient Economy (ACEEE). Consumers must install the specific products and equipment that qualify for the 2009-10 tax credits. Some important details on the home improvement tax credits include:
- For each type of qualifying equipment, the credit is for 30 percent of the cost up to $1,500.
- It is a one-time tax credit that can be claimed in part or in whole for tax year 2009 and/or tax year 2010.
- Homeowners who claimed the $500 credit available in 2006-7 can claim the remaining $1,000 credit for additional products bought and installed in 2009 and/or 2010.
- There are two basic categories of qualifying equipment—“building envelope” products and heating and cooling equipment.
- Building envelope products are replacement windows (including storm windows, storm doors, and skylights), certain ENERGY STAR asphalt and metal roofs, insulation and other sealing products.
- Heating and cooling equipment includes furnaces, boilers, ground source or geothermal heat pumps, gas or propane water heaters, central air conditioning systems (but not window air conditioner units) and biomass stoves.
- Installation costs are not covered for building envelope products.
- Installation costs are covered for heating and cooling equipment.
- For some products, the qualifying criteria are more stringent than they were in prior years. For example, all ENERGY STAR windows no longer qualify.
For detailed information on what qualifies, visit www.energytaxincentives.org.