Q: What are the various tax credits available for green and energy-efficient home improvements and remodels?
What tax credits are available for green and clean energy home improvements? I would love a laundry list of these tax credits. I'd also like to know what the qualifications are for each. Additionally, it would be great to know how much each of the home improvements cost and how much they save in monthly bills (if related to energy or water). ...I think this list would be helpful for a lot homeowners with a green conscience. Thanks.
A: A Greener Home Also Comes With Less Taxes
Home Insulation Tax credit
How much can you claim?
You can claim 30% of the qualifying costs (i.e. insulation, energy efficient windows), up to $1,500. In other words, by purchasing $1,000 worth of loose-fill energy insulation, $300 could be claimed as a tax credit. Last year, the maximum credit amount was up to $500 and 10% of the costs.
Greater Insulation = Lower Energy Bill By ~10%
Not only will you be able to lower your tax bill but your actual heating bill will also be reduced. Energy star estimates that the average homeowner that insulates and seals their homes will be able to lower their annual heating & cooling costs by 20% which is equivalent to 10% of their total annual energy bill. In dollar terms, let's say your average monthly energy bill is $200, your bill will be reduced by $20 each month or $240 a year.
What are the Qualifying Costs to Improve Energy Efficiency?
Energy Efficient Exterior Windows & Doors
Roofs (Metal & Asphalt)
Energy Efficient Heating & Air Conditioning Units
Water Heaters & Stoves
NOT the services for hiring a contractor
Make Sure The Home Improvements Are Energy Star Certified
Note that most of the items that you purchase to make the improvements will need to have an energy star certification to qualify for this energy credit. To see a complete listing refer to energy star.
How do I apply?
Fill out IRS Form 5965 when you submit your 2009 tax return. This is also claimed on line 52 of your 1040.
How Long is the Credit Good For?
The improvements must be placed into service during 2009 and 2010 to be claimed as a tax credit.
For more information visit http://www.bidawiz.com/HomeEnergyTaxCredits.aspx or ask our tax experts at http://www.bidawiz.com/tax-questions.aspx
Additional references: http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_methodology
Flag / Report
Answer This Question