Tax Credits for Consumers:
Home Improvements
Tax credits are now available for home improvements:
- must be "placed in service" from January 1, 2009 through December 31, 2010
- must be for taxpayer's principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes qualify)
- $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
- must have a Manufacturer Certification Statement to qualify
- for record keeping, save your receipts and the Manufacturer Certification Statement
- improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
- If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.More.
| Product Category | Product Type | Tax Credit Specification | Tax Credit | Notes |
|---|---|---|---|---|
| Insulation | Insulation | Meets 2009 IECC & Amendments | 30% of cost, up to $1,5001 | Check to see if you have Home Performance with ENERGY STAR in your areas. Adding insulation to your home is covered. |
| Windows & Doors | Windows, Doors, and Skylights | Before June 1, 2009: Must meet ENERGY STAR criteria After June 1, 2009: U factor <= 0.30 SHGC <= 0.30 | 30% of cost, up to $1,5001 | Not all ENERGY STAR labeled windows, doors, and skylightsqualify for tax credit. |
| Storm Windows & Storm Doors | In combination with the exterior window over which it is installed:
| 30% of cost, up to $1,5001 | ||
| Roofing | Metal Roofs, Asphalt Roofs | All ENERGY STAR qualified metal and reflective asphalt shingles | 30% of cost, up to $1,5001 | |
| HVAC | Central A/C | Split Systems: SEER >= 16, EER >=13 Package systems: SEER >= 14, EER >= 12 | 30% of cost, up to $1,5001 | Note — not all ENERGY STAR products will qualify for the tax credit. |
| Air Source Heat Pumps | Split Systems: HSPF >= 8.5, EER >= 12.5, SEER >= 15 Package systems: HSPF >= 8, EER >= 12, SEER >= 14 | 30% of cost, up to $1,5001 | ||
| Natural Gas or Propane Furnace | AFUE >= 95 | 30% of cost, up to $1,5001 | Note — not all ENERGY STAR products will qualify for the tax credit. | |
| Oil Furnace | AFUE >= 90 | 30% of cost, up to $1,5001 | ||
| Gas, Propane, or Oil Hot Water Boiler | AFUE >= 90 | 30% of cost, up to $1,5001 | ||
| Advanced Main Air Circulating Fan | No more than 2% of furnace total energy use. | 30% of cost, up to $1,5001 | ||
| Water Heaters | Gas, Oil, Propane Water Heater | Energy Factor >= 0.82 or a thermal efficiency of at least 90%. | 30% of cost, up to $1,5001 | |
| Electric Heat Pump Water Heater | Same criteria as ENERGY STAR: Energy Factor >= 2.0 | 30% of cost, up to $1,5001 | ||
| Biomass Stove | Biomass Stove | Stove which burns biomass fuel to heat a home or heat water. Thermal efficiency rating of at least 75% as measured using a lower heating value. | 30% of cost, up to $1,5001 | FAQ on Biomass Stoves. |
| Geo-Thermal Heat Pump | Geo-Thermal Heat Pump | Same criteria as ENERGY STAR: Closed Loop: | 30% of the cost | All ENERGY STAR geo-thermal heat pumps qualify for the tax credit. What about water-to-water geothermal heat pumps? Must be “placed into service” before December 31, 2016. |
| Solar Energy Systems | Solar Water Heating | At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. The system must be certified by the Solar Rating and Certification Corporation (SRCC). | 30% of cost | All ENERGY STAR solar water heaters qualify for the tax credit. Must be placed in service before December 31, 2016. |
| Photovoltaic Systems | Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. | 30% of cost | Must be placed in service before December 31, 2016. | |
| Small Wind Energy Systems | Residential Small Wind Turbines | Has nameplate capacity of not more than 100 kilowatts. | 30% of cost | Must be placed in service before December 31, 2016. |
| Fuel Cells | Residential Fuel Cell and microturbine system | Efficiency of at least 30% and must have a capacity of at least 0.5 kW. | 30% of the cost, up to $500 per .5 kW of power capacity | Must be placed in service before December 31, 2016. |
| Cars | Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles | Based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models | There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Toyota and Honda have already been phased out. Credit is still available for Ford, GM and Nissan. For more information visit:Fueleconomy.gov Use IRS Form 8910 Use IRS Form 3800 | |
| Plug-in hybrid electric vehicles | $2,500–$7,500 | The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits). Effective January 1, 2009. |
1Subject to a $1,500 maximum per homeowner for all improvements combined.
Efficient Cars
Starting January 1, 2009, there is a new tax credit for Plug-in hybrid electric vehicles, starting at $2,500 and capped at $7,500 for cars and trucks (the credit is based on the capacity of the battery system). The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).
Tax credits are available to buyers of hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles. The tax credit amount is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models. These credits are available for vehicles placed in service starting January 1, 2006. For hybrid and diesel vehicles made by each manufacturer, the credit will be phased out over 15 months starting after that manufacturer has sold 60,000 eligible vehicles. For vehicles made by manufacturers that have not reached the end of the phase-out, the credits will end for vehicles placed in service after December 31, 2010. See the IRS Website for updated information 
.
IRS Guidance:
- IRS Notice 2009-53 (6/22/2009) Interim guidance for Section 25C
- IRS Notice 2009-41 (5/11/2009) Interim guidance for Section 25D
For More Information:
For Help with your Tax Planning call Teri at 678-763-1372 or visit www.EvergreenPlanning.org
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