Tax Credits For Energy Efficient Home Upgrades
To encourage homeowners to make their homes more energy efficient, the American Recovery and Reinvestment Act of 2009, which came out in February of this year, has a provision that offers tax credits for energy efficient upgrades to homes. Most projects can claim credits for 30% of the materials cost up to $1,500, and include things like new windows, doors, roofs, insulation, water heaters, heating and cooling systems, and biomass stoves.
Through the years 2009 and 2010, homeowners can claim their tax credit for qualifying upgrades, which is different from a tax deduction. A tax credit lowers the bill by the full amount, while a tax deduction depends on your individual tax bracket. For instance, a $1,000 tax credit will get you $1,000 back; while a $1,000 tax deduction will get you $250 back if your tax bracket is 25%.
Check this Energy Star page for a chart on the requirements of the upgrades. If your project meets the qualifications, you can fill out the forms on that page with the IRS and claim your tax credit. 2009 and 2010 are good years to make upgrades you’ve been meaning to make- they’re a little cheaper this year!
Also, some projects that are much larger can qualify for an uncapped tax credit to eliminate your year’s tax burden altogether- and through the year 2016. These projects include geothermal heat pumps, solar water heaters, solar panels, and small wind-energy systems.
Bookmark this website, which is a large database by state of all kinds of incentives for renewable efficiency and energy efficiency: www.dsireusa.org and check it for financial incentives whenever you’re planning a new home project.