Green Tax Credits

by Stephen Benevento

If you’ve been putting off some home improvements, now may be the right time to call your contractor so you can take advantage of the deals offered by the federal government. The IRS Code related to tax credits for existing homes, which had expired at the end of 2007, was reinstated as part of the economic rescue package. The credit rate and lifetime cap were tripled to 30 percent and $1,500, respectively. So, for example, if you spend $5,000 or more on new qualifying windows, you will receive the maximum credit of $1,500. Additionally, the list of eligible improvements was expanded and the deadline for applying has been extended through the end of 2010. The $1,500 credit is the total allowed for the two year period (2009-2010). There is no upper or lower income limit to qualify for these credits.

Eligible improvements include energy efficient doors and windows, insulation, heat pumps, furnaces, roofs (metal and asphalt), HVAC, biomass stoves, and water heaters (non-solar). The items you purchase must be installed during 2009 or 2010 and must be in your principal residence. The item must also have a Manufacturer Certification Statement to qualify (not all Energy Star rated products qualify). While the Manufacturer’s Certification and receipt are not required when you submit the appropriate IRS Form to receive the credit, it is a good idea to hold on to the documentation in case you are audited. (For more information on qualifying items and eligibility requirements visit www.irs.gov.)

More efficient homes save on water and energy bills and these tax credits allow such upgrades to be more affordable. Good news for all of us who are finding it difficult to buy that new fridge to replace our leaking one in these uncertain times. And you thought that the government was only giving money to banks and auto companies! This break not only helps homeowners, it helps us all take a step toward a more responsible energy future.