 |
|
|
January 2010 Along Those Lines
Stimulating incentives
 Tax credits for upgrades available through 2010
by Megan McKoy
Consumers who took the plunge and made qualifying energy efficiency upgrades in 2009 should see additional benefits this spring as tax season rolls around. For those still waiting on the sidelines, you have until the end of 2010 to take advantage of federal energy efficiency tax credits.
Through the 2009 American Recovery and Reinvestment Act — better known as the stimulus bill — Uncle Sam offers a personal tax credit of up to $1,500 for energy efficiency measures made at existing homes during 2009 and 2010. Consumers can recover 30 percent of the cost of adding insulation materials and exterior doors, windows, and roofs designed to help reduce a home’s heat loss or gain. The credit also pulls in efficient central air conditioners, air-source heat pumps, hot water boilers, and biomass stoves.
“These credits put more money in homeowners’ pockets,” said Rob Marvin, media relations specialist for the Internal Revenue Service. “Say you spend $1,000 on new insulation. Taxpayers would get, in the form of a tax credit, $300 back. This translates to a 30 percent tax credit. That’s a lot more generous than the old [10 percent] credit provided for the 2006 and 2007 tax years.”
However, qualifying guidelines are tougher, too.
“For an item to qualify, it has to be even more energy-efficient than under the 2006 and 2007 program,” Marvin noted. “To utilize the new credit, a home improvement must have taken place after Feb. 17, 2009 [the day the stimulus bill was signed into law].”
So how can you know which products qualify for the tax credit? Some purchases are easier to determine than others.
“For exterior windows and skylights, rely on the Energy Star label,” Marvin added. “This is the green label you see in stores.”
For other efficiency upgrades, request a Manufacturer Certification Statement that the product or component qualifies for the tax credit. You can also visit www.irs.gov/recovery to review guidelines for qualifying purchases.
You must file for energy tax credits using IRS Form 5695. With a maximum value of $1,500 for improvements made in 2009 and 2010, the credit may be applied toward material costs on all projects. Installation costs for heating, ventilation and air conditioning systems, and biomass stoves also count towards the credit.
Energy tax credits reduce taxes owed, dollar for dollar, and can be carried forward to following years. While they can help boost any refund you receive, you won’t receive a check directly for the credit amount.
Renewable credits
Consumers who want to generate their own power are eligible for renewable energy tax credits on projects completed through 2016.
“This covers alternative-energy equipment connected to your house, such as solar water heaters, geothermal heat pumps, small wind turbines, and other similar projects,” said Marvin.
The credit, covering 30 percent of the cost of materials and installation for solar panels, solar water heaters, and geothermal heat pumps, applies to both existing homes and new construction. Projects must be placed into service between Jan. 1, 2009, and Dec. 31, 2016.
ENERGY STAR, a joint program of the U.S. Department of Energy and the U.S. Environmental Protection Agency, provides guidelines on what qualifies for both tax credits at www.energystar.gov, keyword “Tax credits.”
The IRS also provides a wealth of resources on all of the tax benefits offered through the stimulus program at www.irs.gov/recovery.
Many electric cooperatives around Indiana offer further subsidies or rebates making homes more efficient. The state of Indiana offers a tax credit to individuals and small businesses for the costs associated with purchasing Energy Star-qualified air conditioners, furnaces, programmable thermostats and water heaters. The credit may be claimed against the state income tax, insurance premium tax, or financial institutions tax. The amount of the tax credit is set at 20 percent of the expenditures for qualified heating and cooling equipment up to $100 per taxable year.
For a listing of state and local energy efficiency assistance available, visit the Database for State Incentives for Renewables & Efficiency, a project funded by the U.S. Department of Energy, at www.dsireusa.org.
Megan McKoy writes for the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus consumer-owned, not-for-profit electric cooperatives.
Written By: eceditor
Date Posted: 12/22/2009
Number of Views: 216
Return
|
|
|
|
|
|
|
|
|