Using the Stimulus Package to Go Green
Tax time has come and gone, but that does not mean that you should put tax rebates out of your mind until next season! The stimulus package passed by Congress and signed into law by President Obama greatly increases the amount of tax credits you can claim for certain home improvements in 2009 and 2010. Not sure what qualifies? Don't worry, we will help you navigate your way through the tangled web of government red tape, and help you get the money you deserve!
As expected, there are some strings attached. The general rules are;
- Qualifying items must be placed into service between January 1, 2009 and December 31, 2010.
- Items purchased must be for the taxpayer's principal residence. The only exception comes with geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems (they can be installed on rentals or second homes...more on these specific items later).
- $1500 is the maximum total amount that can be claimed for all items placed into service in 2009 and 2010. You can claim 30% of the cost of the item(s) on your 2009/2010 tax return. In other words, if you spend $5000, you can claim $1500 in deductions. Also beware that this DOES NOT include installation of the product, but the product only. (The specific items named earlier are not subject to this specific cap and will be discussed later.)
- For the items purchased, you need a manufacturer Certification Statement to qualify.
- For your records (in case of the dreaded audit), save the receipt.
- Improvements in 2009 need to be claimed on your 2009 tax return (to be filed by April 15, 2010). Same for improvements made in 2010.
- You can only claim the $1500 one time. You may split it between 2009 and 2010, but you cannot claim the $1500 in both 2009 and 2010.
Windows and Doors
- Windows, skylights, and exterior doors must have a U factor <=0.30 and and SHGC of <=0.30. Not all Energy Start windows will qualify.
- Storm Windows and Doors must meet IECC 1 in combinatin with the exterior window over which it is installed, for the appropriate climate zone.
- Metal and Asphalt roofs qualify if they are Energy Star Certified and if they are expected to last at least 5 years.
- Needs to meet 2009 IECC and Amendments. To qualify, its primary purpose must be to insulate (insulated siding does not qualify), and must be expected to last 5 years or have a 2 year warranty.
- For complete details, see your liscensed HVAC dealer/installer, and visit www.energystar.gov
- All Energy Star Tankless Gas Water Heaters qualify.
- Gas, Oil, or Propane Water Heaters must have an energy factor >=0.82 or a thermal energy of at least 90%.
- All Energy Star electric heat pump water heaters qualify for the tax credit.
- Must have a thermal energy rating of at least 75% as measured using a lower heating value.
- Geo-thermal heat pumps
- Solar Water Heaters
- Photovoltaic Systems
- Residential Small Wind Energy Systems
- Fuel Cells
- Certain Hybrid Vehicles
*Note- The author of this article is not a Certified Tax Professional, and thus any tax advice should be solicited from your tax professional.
