Homeowners Tax Credit

Real Estate Agent with Weichert Realtors | Silver Spring, MD Phone Direct 240-506-2434

Homeowners Tax Credits 




So your car isn't a clunker? 
Your not a first timer buying you're a home? 
But, maybe your air conditioning unit is old and not working efficiently!
Maybe you've always wanted solar panels on your home.
There may still be a tax break waiting for you!

Although there has not been much hype surrounding these credits and deductions  passed this year and last year by federal stimulus bills - retailers say sales of new energy-efficient products are beating expectations in the midst of the recession.

Let's open our Homeowner's toolbox and see what is inside for homeowners project that are covered by government tax credits. 

Homeownership and green improvements will be more affordable for more Americans in 2009, thanks to several provisions in the American Recovery and Reinvestment Act. The changes will put more money in taxpayers' pockets and allow homeowners to save thousands of dollars over the next several years.

The new stimulus plan also includes tax credits equal to 30 percent, up to $1,500, for certain energy-efficient improvements to residential properties. The Residential Energy Property Credit can be claimed on 2009 and 2010 returns for improvements such as adding insulation or installing energy-efficient windows, doors, or heating and air conditioning systems. Bigger improvements involving alternative energy equipment such as solar hot water headers, geothermal heat pumps and wind turbines may be claimed on 2009 to 2016 returns under the Residential Energy Efficient Property Credit.

Most homeowners have a "tomorrow" project or two - you know, the things put off until there's a little extra cash or a lot more time. They mean to get to it; they just haven't yet.

This year might be the time.

As part of the economic stimulus plan, the federal government is offering tax credits for a wide range of energy-efficient products, from windows and doors to solar water heaters.

Federal stimulus laws allow homeowners to get a tax credit of 30% of the cost of
energy efficient improvements to your home including:

· Windows and doors

· Roofing

· Insulation

· Heating and cooling systems

· Central air conditioning

· Water Heaters and

· Solar Energy systems

Note that all home products that qualify for the stimulus plan tax credits must meet certain standards for energy efficiency.

Let's take a closer look at some of these home improvements . . .



1)  Windows and Doors


Windows are one of the largest energy wasters.

When replacing Exterior windows, skylights and doors, they must meet specific requirements to qualify for the tax credit..

The cost for a standard-sized window from standard impact glass to low-e (low-emittance) insulated Energy Star compliant impact glass depends on the manufacturer.  Of course, smaller houses will have a larger percentage of the cost paid for by the credit, but all houses will benefit from the energy savings.

Tax credit: 30 percent of cost, up to $1,500 for all improvements combined.
Labor and installation are not included.


2) Roofing

All Energy Star-labeled metal and asphalt roofs qualify. The roof must be expected to last five years or have a two-year warranty.

Using Energy Star 3-tab shingles is a no-brainer because the cost of the shingle is about the same as the standard shingle. You get the benefit of energy savings in the form of decreased cooling costs and the 30% tax credit.



3) Insulation

As of now, tax credits apply to insulation added to walls, ceilings and floors. The insulation also must meet the
2009 International Energy Conservation Code.

Insulating your attic is fairly cheap (about 40 cents per square foot ), and yields substantial energy savings and the government is going to pick up 30 percent of the entire cost.

If you don't have sufficient insulation in your attic, just do it.

Tax credit: 30 percent of cost,
up to $1,500 for all improvements combined.
Labor and installation are not included.



 4) Heating and Cooling Systems

Among the upgrades that qualify for the tax credits are
high-efficiency central air-conditioning units,
including air-source heat pumps, ground-source, or geothermal, heat pumps and high-efficiency water heaters,
including heat pump water heaters.


5) Central air conditioning

Split systems must have:

· Energy Efficiency Ratio of at least 13

· Seasonal Energy Efficiency Ratio of at least 16

Package systems must have:

· EER of at least 12

· SEER of at least 14

· Tax credit: 30 percent of cost,
up to $1,500 for all improvements combined.
Installation costs are covered.


 6) Water Heaters

Gas, oil and propane water heaters

· Energy factor of a thermal efficiency of at least 90 percent.

· All Energy Star gas tankless models qualify,
but not all Energy Star gas-storage and gas-condensing water heaters do.

Electric heat pump water heater

· All Energy Star-labeled electric heat pump water heaters qualify.

Solar water heaters

The system must be certified by the Solar Rating and Certification Corp., and at least half of the energy generated by the product must come from the sun.
You can claim only the cost of the solar water heating product, not the entire water heating

There may be other incentives offered through energy companies and the state and you're
looking at "maybe a seven-year payback, then mostly free hot water for many years."

Tax credit: 30 percent of cost, up to $1,500 for all improvements combined.
Installation costs are covered.

Tax credit: The credit is not available for expenses for swimming pools or hot tubs.
The tax credit is 30 percent of the cost and is not subject to the $1,500 cap.
Deadline is Dec. 31, 2016. Installation costs are covered.


7) Solar photovoltaic systems

Solar photovoltaic systems convert sunlight into
electricity that can be used in your home. To qualify for the credit, they must provide electricity for the residence and must meet fire and
electrical code requirements.

Some states have also offered additional incentives for these solar systems.


Tax credit: The tax credit is 30 percent of the cost. Must  be placed in service by Dec. 31, 2016.
Installation costs are also covered.

Key Tips to Research Before you Buy

The tax credits are available only for your principal residence and should be filed on your 2009 taxes (paid by April 15, 2010).

Double-check before you buy. Not all Energy Star products, for example, qualify for a tax credit.

Get it done. The item must be "placed in service," that is, ready and available for use, between Jan. 1, 2009, and Dec. 31, 2010, for most products. The deadline is extended for some higher-ticket items.



Posted by

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Barbara Michaluk, Realtor

Phone 240-506-2434

Email: michaluk@verizon.net  /  Web: BarbaraSellsMDhomes.com

Authorized Leisure World Specialist / Senior Real Estate Specialist /
Internet Marketing Specialist / Certified E-Pro / Certified Staging Agent

Weichert Realtors / 3816 International Dr / Silver Spring, MD 20906

Authorized Leisure World Specialist     Barbara Michaluk Graduate Internet Marketing Specialist Barbara Michaluk Senior Real Estate Specialist   


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Moshe Cohen
Valuation Solutions - Morristown, NJ


Do you know that the NJAR is trying to block legislation in NJ that will require an energy audit as part of the home inspection?

Sep 04, 2009 11:59 AM #1
Pat Champion
Coldwell Banker Camelot Realty - Mount Dora, FL
Call the "CHAMPION" for all your real estate needs

It is good to know about all the tax credits available for individuals today. It is definitely a great time to do improvements and have extra money at the end. Thanks for sharing.

Sep 04, 2009 12:08 PM #2

What happens if the homeowner didnt make any money that year.  Meaning, they had no taxes for whatever reason.  Does this mean they can get the $1500 tax credit since they didnt pay anything?

Oct 17, 2009 07:18 AM #3
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Barbara Michaluk

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