There are currently three categories of federal tax credits available for energy-efficient or renewable systems upgrades that are available to homeowners.
The first category of improvements applies only to an existing home that is your principal residence. These credits expire on December 31st 2010 and can give you a tax credit of up to $1,500, essentially 30% of up $5,000 in improvements. Some of these credits apply to the full cost of the improvements while others do not apply to installation costs.
Remember, a tax credit reduces your tax liability. For example, if you have a tax liability of $10,000 for 2010 you can reduce it to $8,500 if you spend $5,000 on improvements. The limit is for 2009 and 2010 combined. So if you received a credit of $1,000 in 2009 you can only claim another $500 this year.
Not only can you get a tax credit but these improvements can reduce your energy bills going forward. Energy prices always increase over time but efficiency upgrades can make a homeowner feel those increases less.
In a nutshell these improvements are:
This includes crops and trees, wood and wood waster, plants, grasses, residues and fibers. Check to see if you have any local air quality restrictions that may affect the usage of these devices.
Heating, Ventilation, Air Conditioning (HVAC)
Advanced main Air Circulating Fan
Air Source Heat Pumps
Central Air Conditioning
Boiler (Gas, Propane or Oil Hot Water)
Furnace (Natural Gas, Propane or Oil)
Batts, Rolls, Blow-in, Rigid, expanding spray and pour-in-place
Weather stripping, Caulk, house Wrap, Canned Spray Foam
Excludes installation costs
Roof (Metal & Asphalt)
A qualifying roof will reflect more of the sun’s rays and in turn heat up less. This transfers less heat from a roof into the home. Check with the EAP and ENERGY STAR for qualifying roofing materials. This credit does not include installation costs.
Water Heaters (non-solar)
Gas, Oil, Propane and Electric Heat Pump. Heating water for your home can account for 14%-25% of your energy usage.
Windows & Doors
This covers windows, doors and skylights that have a U-factor and Solar Heat Gain Coefficient (SHGC) less than or equal to 0.30. This credit does not include installation costs.
Our qualified staff of architects and LEED professionals can help you determine which upgrades will give you the most bang for your buck. It is important to calculate the payback period and tax credits when selecting energy efficiency upgrades. Visit www.energystar.gov for more information then call us.
Come back soon to learn about the other two groups of tax credits which are good through 2016.