In early 2009, the American Recovery and Reinvestment Act was enacted as part of a plan to stimulate the economy. The bill grants tax credits to homeowners who make specific home improvements during 2009 and 2010 that meet certain energy-efficiency guidelines.
If you missed out in 2009, these credits still apply for 2010. You have just a few months to take advantage!
Here are some of the basics; for detailed information go to to energystar.gov/taxcredits.
■The eligible improvement must be placed in service or work must be completed between January 1, 2009 and December 31, 2010.
■A maximum of $1,500 can be claimed for qualifying products.
■You must have a Manufacturer Certification Statement for the product in order to qualify. Save receipts and the Manufacturer Certification Statement; for new windows, keep the Energy Star label.
■Improvements must be made to your principal residence. However, certain products also qualify for second homes.
■Claim improvements made in 2009 on your 2009 taxes using IRS Tax Form 5695.
■Tax credits for windows, doors, insulation, roofs, HVAC, and non-solar water heaters are not available for new homes. Certain other improvements do qualify for new homes.
Items that are eligible for the tax credits include:
■Exterior windows, skylights, storm windows, and doors that have a U factor below 0.30 and a Solar Heat Gain Coefficient, or SHGC, of less than 0.30.
■Certain types of insulation – specific lifespan and warranty requirements apply
■Energy Star brand metal or asphalt roofing – specific lifespan and warranty requirements apply
■Central air conditioning
■Furnaces – either natural gas or propane
■Hot water boilers
■Hot water heaters – either gas, oil, or propane
■Photovoltaic solar panels
■Wind energy systems
■Residential fuel cells and micro-turbine systems
All qualifying products must meet certain energy-efficiency levels; thus, not all products qualify for the tax break. Only those with higher energy efficiency ratings are eligible, and these products typically cost more than standard products. Also remember that the $1,500 maximum (as a percentage up to 30% of the cost of the upgrade) is cumulative for ALL improvements.
If you’re thinking about making home improvements this year, the time is definitely now! Your home improvement consultant can provide you with additional information on qualifying products and exceptions.