The Stimulus Package of 2009 created or renewed tax incentives in the form of an energy efficiency tax credit for a wide variety of products and appliances for those who undergo home improvements for energy efficientcy. Upgrades purchased through December 31, 2010 are eligible for a 30% tax credit, up to a cap of $1500.
Most homes, unless they are brand new, can benefit from an energy efficiency make-over. Eligible for energy efficiency credits include new windows and doors, new heating and cooling systems and some appliances. What home owners must do to claim the credit is to fill out and file IRS Tax Form 5695 and keep receipts and the Manufacturer Certification Statement with tax records in case of audit.
For new homes owners and builders can save additional funds through the energy efficiency tax credit program by purchasing and installing renewable energy components, such as solar heating and cooling systems, or geothermal heat pumps. These improvements do not have a $1500 limit, so the entire cost of the upgrade can be used to offset the 30% tax credit. Other eligible improvements include wind energy systems and micro-turbine generators.
Putting in a green roof, adding insulation, or installing an energy efficient heating and cooling system will not only net tax credits initially, it will also give the homeowner ongoing savings on energy bills, by as much as a few hundred dollars per year, or more. Last, but not least, these home improvements lower carbon dioxide and greenhouse gas (GHG) emissions, helping the environment around the home and the earth in general.
In many cities and states there are additional incentive programs, rebates and tax credits available for energy efficiency. A great source for checking on local opportunities for savings is the Database of State Incentives for Renewables and Efficiency (DSIRE). This handy, regularly updated file can be searched by area or by type of improvement. The best source for information on the products that qualify for federal tax credits is the EPA’s Energy Star website which contains a detailed list of available credits and restrictions.
Tax credits are also available for certain energy efficient vehicles, including hybrid vehicles and those that use alternative fuel (biofuels, biodiesel, lithium battery electric and solar). Credits save owners a varying amount, up to thousands of dollars off the purchase price. These credits phase out as the model reaches the 60,000 vehicles sold mark, so check the eligibility out carefully before purchasing a specific model. The official source of information on eligible hybrid vehicles is the Summary of the Credit for Qualified Hybrid Vehicles . For alternative fuel vehicles visit the Alternative Motor Vehicles credits informational site.
In addition to saving money for owners, using these energy efficient products also contributes to a reduced carbon footprint and makes the environment a cleaner for now and generations to come.
Tags: energy efficiency credits, energy tax credit, Green Stimulus, Green tax, IRS Tax Form 5695
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