It is not too late to call us at Home Energy Solutions of the Triad, LLC to take full advantage of the current tax incentives available for weatherizing your home. Please call us at 1-800-724-4841 to schedule your home energy audit today!!!
On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits. The highlights are:
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- The tax credits that were previously effective for 2009, have been extended to 2010 as well.
- The tax credit has been raised from 10% to 30%.
- The tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
- The maximum credit has been raised from $500 to $1500 for the two years (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
- The $200 cap on windows has been removed.
Tax Credits for Consumers
A tax credit can provide significant savings. It reduces the amount of income tax you have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces the tax itself. You must refer to the final Internal Revenue Service (IRS) rules to determine what qualifies for the tax credit.
Tax credits are now available for home improvements:
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- must be "placed in service" from January 1, 2009 through December 31, 2010. The IRS defines "placed in service" as "when the property is ready and available for use."
- must be for taxpayers principal residence
- maximum amount is $1,500 in 2009 & 2010 for most home improvements (geothermal heat pumps, solar water heaters, solar panels, fuel cells, and windmills are not subject to this cap)
- for record keeping, save your receipts and the Manufacturer Certification Statement3, OR for windows, you can save the ENERGY STAR label from your new windows
- improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010). Use IRS Tax Form 5695 (2009 version), which will be available late 2009 or early 2010
- If you are building a new home, you can qualify for the tax credit for photovoltaics, solar water heaters, small wind systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.
Starting January 1, 2009, there is a new tax credit for Plug-in hybrid electric vehicles, starting at $2,500 and capped at $7,500 for cars and trucks (the credit is based on the capacity of the battery system). The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).
Tax credits are available to buyers of hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles. The tax credit amount is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models. These credits are available for vehicles placed in service starting January 1, 2006. For hybrid and diesel vehicles made by each manufacturer, the credit will be phased out over 15 months starting after that manufacturer has sold 60,000 eligible vehicles. For vehicles made by manufacturers that have not reached the end of the phase-out, the credits will end for vehicles placed in service after December 31, 2010.
Tax credits are available for qualified solar water heating and photovoltaic systems. The credits are available for systems placed in service by December 31, 2016. The tax credit is for 30% of the cost of the system (up to $2,000 for solar water heaters). This credit is completely separate from the $1,500 home improvement credit.
Tax credits are available to homeowners who install residential small wind energy systems. The credits are available for systems placed in service by December 31, 2016. The tax credit is for 30% of the cost of the system, and is not limited to the $1,500 home improvement cap.
There is a consumer tax credit of up to 30% of the cost (up to $1,500 per 0.5 kW of capacity) for installing a qualified fuel cell and microturbine system. The credits are available for systems "placed in service" by December 31, 2016. This credit is not limited to the $1,500 home improvement cap.
SUMMARY OF TAX CREDITS FOR HOMEOWNERS
|
Product Category |
Product Type |
Tax Credit Specification |
Tax Credit |
Notes |
|
Windows & Doors |
U factor <= 0.30 |
30% of cost, up to $1,500 |
NOT All ENERGY STAR labeled windows and skylights qualify for tax credit. |
|
|
Windows & Doors |
Storm Windows |
Meets IECC in combination with the exterior window over which it is installed, for the applicable climate zone |
30% of cost, up to $1,5002 |
Manufacturer's Certification Statement will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.) that a product may be combined with to be eligible in specific climate zones. |
|
Windows & Doors |
U factor <= 0.30 |
30% of cost, up to $1,500 |
NOT ALL ENERGY STAR DOORS will qualify. |
|
|
Windows & Doors |
Storm Doors |
In combination with a wood door assigned a default U-factor by the IECC, and does not exceed the default U-factor requirement assigned to such combination by the IECC |
30% of cost, up to $1,500 |
|
|
Roofing |
Metal Roofs, Asphalt Roofs |
ENERGY STAR qualified |
30% of cost, up to $1,500 |
ALL ENERGY STAR labeled 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 $1,500 |
For insulation to qualify, its primary purpose must be to insulate. (example: vapor retarders are covered, siding does not qualify). Must be expected to last 5 years OR have a 2 year warranty |
|
HVAC |
Central A/C |
Split systems: |
30% of cost, up to $1,500 |
For a list of qualified products, go to the Consortium for Energy Efficiency product directory, click on the Air Conditioners, and in the "CEE Tier" enter "Residential Advanced Tier 3". Note: NOT ALL ENERGY STAR products will qualify for the tax credit. ENERGY STAR specification: Package systems: |
|
HVAC |
Air Source Heat Pumps |
Split systems |
30% of cost, up to $1,500 |
Note: NOT ALL ENERGY STAR products will qualify for the tax credit. ENERGY STAR specification: |
|
HVAC |
Natural Gas or Propane Furnace |
AFUE >=95 |
30% of cost, up to $1,500 |
For a list of qualifying products go to the Gas Appliance Manufacturing Association Note: NOT ALL ENERGY STAR products will qualify for the tax credit. ENERGY STAR Specification: Gas Furnaces: AFUE >= 90 Oil Furnaces: AFUE >= 85 Boilers: AFUE >= 85 |
|
HVAC |
Oil Furnace |
AFUE >= 90 |
30% of cost, up to $1,500 |
|
|
HVAC |
Gas, Propane, or Oil Hot Water Boiler |
AFUE >= 90 |
30% of cost, up to $1,500 |
|
|
HVAC |
Advanced Main Air Circulating Fan |
No more than 2% of furnace total energy use |
30% of cost, up to $1,500 |
For a partial list of qualifying products go to the Gas Appliance Manufacturing Association |
|
Geo-Thermal Heat Pump |
Geo-Thermal Heat Pump |
Same criteria as ENERGY STAR: Closed Loop: |
30% of the cost - NOT subject to $1,500 cap |
All ENERGY STAR labeled geo-thermal heat pumps qualify for the tax credit. Must be "placed into service" between Jan. 1, 2008 - Dec. 31, 2016. |
|
Water Heaters |
Gas, Oil, Propane Water Heater |
Energy Factor >= 0.82 or a thermal efficiency of at least 90%. |
30% of cost, up to $1,500 |
Note: NOT ALL ENERGY STAR gas storage and gas condensing water heaters will qualify for the tax credit. ALL ENERGY STAR gas tankless models will qualify. ENERGY STAR criteria: Gas Storage: Gas Tankless: Gas Condensing: For a partial list of qualifying products go to the Gas Appliance Manufacturing Association |
|
Water Heaters |
Electric Heat Pump Water Heater |
Same criteria as ENERGY STAR: Energy Factor >= 2.0 |
30% of cost, up to $1,500 |
All ENERGY STAR qualified electric heat pump water heaters qualify for the tax credit. |
|
Biomass Stove |
Biomass Stove |
Stove which burns biomass fuel 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 $1,500 |
|
|
Solar Energy Systems |
Solar Water Heating |
|
30% of cost, up to $2,000 |
|
|
Solar Energy Systems |
Photovoltaic Systems |
Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. |
30% of cost |
|
|
Small Wind Energy Systems |
Residential Small Wind Energy Systems |
|
30% of the cost |
Must be "placed in service" by December 31, 2016. Use IRS Tax Form 5695 (version 2009). This form should be available in late 2009 or early 2010. Not limited to $1,500 cap. |
|
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 $1,500 per 0.5 kW of power capacity |
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Cars |
Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles |
Based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models |
There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Toyota and Honda have already been phased out. Credit is still available for Ford, GM and Nissan. For more information visit: Fueleconomy.gov
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|
|
Cars |
Plug-in hybrid electric vehicles |
$2,500-$7,500 |
The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits). Effective January 1, 2009. |
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