Saving Energy NOW Saves YOU Even More
July 8, 2009
Thanks to the American Recovery and Reinvestment Act – saving energy at home saves you money, not just by reducing your utility bills – but now you can receive federal tax credits as well.
Federal Tax Credits for Energy Efficiency include:
Tax Credits for Consumers - Tax credits are available at 30% of the cost, up to $1500 in 2009 & 2010 (for existing homes only) for:
- Windows and Doors
- Insulation
- Roofs (Metal and Asphalt)
- HVAC
- Water Heaters (non-solar)
- Biomass Stoves
Tax credits are available at 30% of the cost, with no upper limit through 2016 (for existing homes & new construction) for:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
- Fuel Cells
What is a tax credit? You don’t receive an income tax credit when you buy the product, like an instant rebate. You claim the credit on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay.
Tax credits vs. tax deductions: In general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions – such as those for home mortgages and charitable giving – lower your taxable income.
Tax credits are now available for home improvements:
- Placed in service from January 1, 2009 through December 31, 2010
- 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
- Have a Manufacturer Certification Statement to qualify (for record keeping, save your receipts and the Manufacturer Certification Statement)
Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
Energy Star has a great website to help you figure out what kinds of energy efficiency measure qualify for tax credits. So whether you’re sealing the envelope by adding insulation, windows or doors or changing to a more energy efficienct geothermal heat pump – find out how to save energy and save yourself some money at the same time!
Also, the Kansas Energy Office does a great job of listing all of the Federal and State incentives for homes and small businesses - so check it out!
-Dorothy Barnett, climateandenergy.org
