New Stimulus Bill Expands Federal Energy Credits

The new Stimulus Bill recently signed by President Obama in 2009 includes an expansion of the Federal Energy Credits for certain home improvements that are made that meet certain energy savings criteria.  Highlights of the changes include:

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.

must be "placed in service" from January 1, 2009 through December 31, 2010

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) - it will be available late 2009 or early 2010

Credits are now available for home insulation. Home insulation cost credits were available for 2005 through 2007, but were not available in 2008.

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. More.

A detailed chart with the amount and qualification criteria for taking the energy credit may be found at http://www.energystar.gov/index.cfm?c=products.pr_tax_credits

The information contained above is for educational purposes only and is not intended for any particular person or circumstance. A competent tax professional should always be consulted before utilizing any of the information contained above. For more information about Income Tax Issues  affecting real estate, visit my website at http://www.maureenmegowan.com