The American Recovery and Reinvestment Tax Act of 2009, signed into law February 17, 2009, by President Obama, offers energy tax credits for energy efficient home improvements that qualify and are installed in 2009 and 2010. The credits are available for up to 30% of the cost of the improvement, with a cap of $1,500. Here are some facts on tax credits available for windows, doors, insulation, roofing, HVAC, water heaters and biomass stoves.
Windows and Doors That Qualify for Tax Credit
Windows, doors and skylights that are installed between January 1, 2009 and June 1, 2009, must meet energy star criteria to qualify. Those installed after June 1, 2009, but before the program expires, must have a U factor and SHGC below or equal to 0.30. Windows, doors and skylights are eligible for up to a 30% of cost tax credit, with a cap of $1,500.
Storm windows and storm doors may qualify for the credit if when combined with the window or door that it covers, the U factor and SHGC is below or equal to 0.30 and it meets the International Energy Conservation Code (IECC).
Energy Efficient Insulation Upgrades in Primary Households
Insulation that is used with a primary purpose of insulating or reduce air leaks (such as weather stripping, house wrap, spray foam designed to air seal, and caulk designed to air seal) can qualify for a tax credit of 30% of its cost (product only), up to $1,500. A Manufacturer’s Certification Statement is also required as a qualification.
Metal Roofing and Asphalt Roofs
When purchasing a metal or asphalt roof, ask the manufacturer if their roof meets energy star requirements and is eligible for a tax credit. They should be able to provide a Manufacturer’s Certification Statement. Up to 30% of the cost of the roofing materials (not installation of roofing) is eligible for the tax credit, with a cap of $1,500.
HVAC Air Source Heat Pumps, Furnaces, Boilers
Different requirements exist for each category listed under HVAC. Central A/C units and Air Source Heat Pumps are based on whether it is a split system or package system, and must meet certain energy requirements.
Tax credits may be available for Natural Gas, Propane Furnaces, Oil Furnaces, Gas, Propane, or Oil Hot Water Boilers, and Advanced Main Circulating Fans. Check with the manufacturer to make sure that the purchased HVAC item falls under the tax credit category with a credit of 30% of the cost, up to $1,500.
Gas, Oil, Propane, Electric Heat Pump Heaters
All energy efficient gas, oil, propane, electric heat pump heaters are eligible for the federal tax credit of 30% of its cost, up to $1,500.
A biomass stove uses biomass fuel (wood, pellets, corn) to heat water or an entire home. The 30% credit on biomass stoves can include the cost of the product as well as installation, up to $1,500.
Important Facts on Home Energy Efficiency Tax Credits
- The above items must be placed in service between January 1, 2009 and December 31, 2010.
- The tax credit for the above items is only applicable for the taxpayer’s primary residence.
- The $1,500 limit applies to one improvement or a combination of improvements for the above listed. Therefore, a cap of $1,500 total applies to all home improvements listed above.
- Request a Manufacturer Certification Statement in order to qualify for the credit.
- Use IRS form 5695 when filing taxes.
- The above items only qualify for home improvements, not for new construction.
When considering household improvements, speak with the manufacturer about possible tax credits and which products qualify. Always keep any paperwork involved (receipts and certifications) in order to document the tax credit properly. For more information, speak with a tax accountant and visit the USA Government’s portal website.
Readers may enjoy more information on federal tax credit information on other home improvements, such as geothermal heat pumps, solar energy systems, small wind energy systems and fuel cells.
Sources: USA Government’s Website.
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