The massive stimulus bill passed in 2009 created alot of tax saving opportunities. In this installment I will cover the Residential Energy Credit portion of the bill:
Basically you get a credit of 30% of the cost of certain improvements. For example if you spend $5,000 on a qualifying improvement your refund will go up by $1,500!
Home Improvements
Must be “placed in service” from January 1, 2009 through December 31, 2010
- must be for taxpayer’s principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify)
- $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
- must have a Manufacturer Certification Statement3 to qualify
- for record keeping, save your receipts and the Manufacturer Certification Statement3
- improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010)
- If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.
Here is a more detailed list of the improvements that qualify. (from the “Energy Star” website)
If you would like detailed information on how the credit will effect your personal tax return please contact the office. 636-441-1110
SUMMARY OF TAX CREDITS FOR HOMEOWNERS
| Product Category | Product Type | Tax Credit Specification | Tax Credit | Notes |
|---|---|---|---|---|
| Windows & Doors | Exterior Windows and Skylights |
*Important Change: Before June 1, 2009: After June 1, 2009: SHGC <= 0.30 |
30% of cost, up to $1,5002 | Not all ENERGY STAR labeled windows and skylights qualify for tax credit.More information |
| Storm Windows | Meets IECC1 in combination with the exterior window over which it is installed, for the applicable climate zone | 30% of cost, up to $1,5002 | Manufacturer Certification Statement3 will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.)4 that a product may be combined with to be eligible in specific climate zones. | |
| Exterior Doors | U factor <= 0.30SHGC <= 0.30 | 30% of cost, up to $1,5002 | Not all ENERGY STAR doors will qualify.More information | |
| Storm Doors | In combination with a wood door assigned a default U-factor by the IECC1, and does not exceed the default U-factor requirement assigned to such combination by the IECC | 30% of cost, up to $1,5002 | ||
| Roofing | Metal Roofs, Asphalt Roofs |
ENERGY STAR qualified | 30% of cost, up to $1,5002 | All ENERGY STAR metal and asphalt roofs qualify for the tax credit.Must be expected to last 5 years OR have a 2 year warranty. |
| Insulation | Insulation | Meets 2009 IECC & Amendments | 30% of cost, up to $1,5002 | For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify).Must be expected to last 5 years OR have a 2 year warranty |
| HVAC | Central A/C | Split Systems: EER >=13 SEER >= 16Package systems: EER >= 12 SEER >= 14 |
30% of cost, up to $1,5002 | For a list of qualified products, go to the Consortium for Energy Efficiency product directory |
| Air Source Heat Pumps | Split Systems: HSPF >= 8.5 EER >= 12.5 SEER >= 15Package systems: HSPF >= 8 EER >= 12 SEER >= 14 |
30% of cost, up to $1,5002 | ||
| Natural Gas or Propane Furnace | AFUE >= 95 | 30% of cost, up to $1,5002 | For a partial list of qualifying products go to: Air-Conditioning, Heating, Refrigeration Institute (AHRI) |
|
| Oil Furnace | AFUE >= 90 | 30% of cost, up to $1,5002 | ||
| Gas, Propane, or Oil Hot Water Boiler | AFUE >= 90 | 30% of cost, up to $1,5002 | ||
| Advanced Main Air Circulating Fan | No more than 2% of furnace total energy use. Read this FAQ if the fan qualifies, but the furnace does not. | 30% of cost, up to $1,5002 | ||
| Water Heaters | Gas, Oil, Propane Water Heater | Energy Factor >= 0.82 or a thermal efficiency of at least 90%. |
30% of cost, up to $1,5002 | All ENERGY STAR gas tankless water heaters will qualify.There are currently no ENERGY STAR qualified gas storage tank or gas condensing water heaters that qualify.View ENERGY STAR criteria for water heaters.
For a partial list of qualifying products go to: Air-Conditioning, Heating, Refrigeration Institute (AHRI) |
| Electric Heat Pump Water Heater | Same criteria as ENERGY STAR: Energy Factor >= 2.0 | 30% of cost, up to $1,5002 | All ENERGY STAR electric heat pump water heaters qualify for the tax credit. | |
| Biomass Stove | Biomass Stove | Stove which burns biomass fuel5 to heat a home or heat water.Thermal efficiency rating of at least 75% as measured using a lower heating value. | 30% of cost, up to $1,5002 | |
| Geo-Thermal Heat Pump | Geo-Thermal Heat Pump | Same criteria as ENERGY STAR:Closed Loop: EER >= 14.1 COP >= 3.3Open Loop: EER >= 16.2 COP >= 3.6 Direct Expansion: |
30% of the cost | All ENERGY STAR geo-thermal heat pumps qualify for the tax credit.Use IRS Form 5695 |
| Solar Energy Systems | Solar Water Heating | At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.The credit is not available for expenses for swimming pools or hot tubs.The water must be used in the dwelling.
The system must be certified by the Solar Rating and Certification Corporation (SRCC). |
30% of cost | All ENERGY STAR solar water heaters qualify for the tax credit.Use IRS Form 5695 |
| Photovoltaic Systems | Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. | 30% of cost | Use IRS Form 5695 |
|
| Small Wind Energy Systems | Residential Small Wind Turbines | Has nameplate capacity of not more than 100 kilowatts. | 30% of cost | Use IRS Form 5695 |
| Fuel Cells | Residential Fuel Cell and microturbine system | Efficiency of at least 30% and must have a capacity of at least 0.5 kW. | 30% of the cost, up to $500 per .5 kW of power capacity | Use IRS Form 5695 |
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