If you own a Denver home, be aware of the fact that time is running out to cash in on the federal home energy-efficiency tax credit, which expires on December 31. Homeowners who purchase eligible energy-efficiency products, or a renewable energy system for their primary residence, will receive a federal tax credit for 30% of the cost, up to $1,500.
The federal “Non-Business Energy Property Tax Credit” gives homeowners the opportunity to earn a tax credit equal to 30% of what they spend on qualifying home energy-efficiency products, including insulation, weatherization products, and high-efficiency heating and air conditioning units. Homeowners can claim the credit when they file their 2010 federal income taxes.
The credit applies to all qualifying material costs (including insulation), and in some cases also applies to installation costs. The maximum credit of $1,500 is for a two-year period, which means that if you claimed a portion of the credit on your 2009 taxes, you can only claim the remaining balance in 2010.
Many products qualify for the tax credit, the most highly recommended investments are in simple energy-efficiency projects, such as insulating and air sealing. Think about these types of improvements before spending money on more costly upgrades, such as solar, wind, and geothermal energy systems.
Not sure where to start? Attics are often the largest source of potential heat loss in a home, and that can be especially important here in Colorado. Homeowners should measure the amount of insulation in their attic with a ruler, to ensure that they have an adequate depth. The average US home may need up to 19” of fiberglass attic insulation, for maximum energy efficiency. After adding any needed insulation, you should also air seal your living space from the attic; this avoids the escape of conditioned air. Also, avoid using products containing formaldehyde to improve air quality.
To take advantage of the credit, homeowners need to submit IRS Form 5695 as part of their 2010 taxes. The form must be accompanied by a store receipt – credit card statements won’t work – and you will need to obtain (and keep on record) a “manufacturer’s certification statement” for each item (these can usually be found on the product manufacturer’s website). The IRS cautions that the manufacturer’s certification statement is not the same as the Department of Energy’s Energy Star label, and that not all Energy Star labeled products qualify for the credit.
Although $1,500 is a great incentive, don't shy away from an energy-efficiency project even if you miss the tax credit deadline. Energy efficiency is a long-term investment, and will save you money over the life of your home. Additionally, many state and local incentives still apply after December 31. Check with your utility company and Colorado’s energy office to investigate incentives and local rebate opportunities.
If you are considering buying an energy-efficient Denver home, start looking now. Contact your local Denver area real estate experts to learn more about your options. We are ready to help you find the perfect green Aurora home, Castle Pines house, or a Washington Park property. Let the Bandy Team find the right green home for you!
Marianne Bandy
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