As the end of the year approaches, a lot of people are scrambling to try and schedule work on their homes that they had been putting off. The reason? Most of the tax credits for energy efficient home improvements that were passed a while back will be expiring at the end of the year on December 31st, 2010.
Details Of The $1500 Energy Efficiency Tax Credit
So here are the basic details of the credit.
- Tax Credit: 30% of cost of the home improvement, up to $1,500
- Expires: December 31, 2010
- Limitations: Must be on an existing home & your principal residence. New construction and rental homes don’t qualify for the credit.
So what that means is that for a qualified home improvement, you would get a tax credit of 30% of the covered cost up to a $1500 total credit. For instance, if you pay $3000 for a gas furnac (excluding installation costs), your credit would be $900.
How To Claim Your Tax Credit
In order to get your tax credit, it would need to be claimed on your 2010 taxes.
For products “placed in service” in 2010, you would take the tax credit on your 2010 income taxes.
Your home improvement should have been placed in service in 2010 if you plan to claim the tax credit for the 2010 tax year.
What Energy Efficient Products Are Eligible?
The tax credit for energy efficient home improvements will apply to a variety of energy star rated products, although not all.
If you purchase an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit. …
Please note, not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, without a tax credit
Among the most common products to be eligible:
- Biomass Stoves.
- Energy efficient doors and windows. Installation costs are not eligible for the credit. Other restrictions apply.
- Water Heaters. Credit includes installation costs; some restrictions for energy efficiency apply.
- Insulation, whether spray foam, fiberglass, or blow-in cellulose, they’re all covered so long as they meet IECC requirements. Installation cost is NOT covered.
- HVAC components, including advanced air handlers, air force heat pumps, central A/C units, boilers, propane, and gas furnaces. Tax credits include installation costs.
- Metal and asphalt roofs. Credit doesn’t include installation costs.
For more details on what products are eligible, FAQs and more, check out the government site here: Federal Tax Credits for Consumer Energy Efficiency