It's Almost Tax Time! Can You Claim a Residential Energy Credit?
You might qualify if you made an eligible energy upgrade in 2009 and the upgrade meets IRS energy-efficiency standards. Many simple home improvements can add a credit of up to $1,500.00. Adding insulation, replacing old windows, fixing a worn roof and replacing your non solar water heater are examples of just some of the improvements that qualify for this credit. Homeowners can recoup 30% of the cost, up to $1,500, for making any of these
qualifying upgrades during 2009 or 2010. The $1,500 does apply to all products combined for both years.
However do not assume Energy Star label automatically qualifies a new appliance for a tax write-off. Talk to your tax consultant and save receipts of any purchases you make. Also, the improvements have to be on your primary residence to qualify. You can include the labor costs for HVAC and water heater installations as well.
There is an uncapped energy tax credit for some residential projects that involve alternative energy sources including solar,
geothermal, and wind. This tax incentive is called the Residential Energy Efficient Property Credit by the IRS. The tax credit, equal to 30% of the project cost, applies to second homes as
well as primary residences. Examples of these types of projects include solar electric systems, solar hot water heaters, geothermal heat pumps, wind
turbines, and fuel cell property.
Because these are credits, not deductions, they increase a taxpayer’s refund or
reduce the tax he or she owes.