home improvements
New and Improved Energy-Efficient Incentives
February 24, 2010 by admin · Leave a Comment
Have you been considering investing in home improvements that might reduce your energy costs? With the passage of the American Recovery and Reinvestment Act of 2009, two valuable tax credits are now available to taxpayers who make energy efficiency improvements to their home in 2009 or 2010.
As you may know, a tax credit is a dollar-for-dollar reduction in tax, and is therefore generally much more valuable than a deduction which only removes a percentage of the tax that is owed. In this case, the government is offering a 30% tax credit, which means that Uncle Sam is in effect offering to pay for up to 30% of any qualified purchase.
The first tax credit is for expenditures made for qualifying energy-efficient home improvements in 2009 and 2010.
Qualifying energy-efficient home improvements include the following:
- Exterior windows (including skylights) and doors
- Insulation systems
- Certain metal and asphalt roofs
- High-efficiency central air conditioners
- Natural gas, propane and oil furnaces and water heaters
- Electric heat pumps and electric heat pump water heaters
Your tax credit will equal 30% of the cost of the improvement, subject to an overall $1,500 limit for 2009 and 2010.
A second credit is available for qualifying expenditures for more expensive “residential energy efficient property,” which includes the following:
- Solar water heating equipment
- Solar electricity generating equipment
- Wind energy equipment
- Geothermal heat pump equipment
- Fuel cell electricity generating equipment
You can qualify for this incentive credit by making any of these improvements to either your US principal residence or vacation home. This credit also equals 30% of your cost, but, except for fuel cell equipment, there is no dollar limit.
