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February 17, 2009, the President signed a stimulus bill (The American Recovery
and Reinvestment Act of 2009) that made some significant changes to the
already existing energy efficiency tax incentives. The new tax credits are
available to homeowners, builders
and commercial building owners and designer. |
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| *A tax
credit is generally more valuable than an equivalent tax deduction because
a tax credit reduces your tax dollar-for-dollar, while a deduction only
removes a percentage of the tax that is owed. Therefore, $1,500 can be subtracted
directly from the amount of tax that is owed, or added to a tax refund.
Consumers can itemize purchases on their federal income tax form, which
will lower the total amount of tax they owe the government. |
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Tax
Credits for "Homeowners"
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Federal
Tax Credits for Energy Efficiency* includes:
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For
Existing Homes Only
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For
Existing Homes and New Construction
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Tax credits are available
at 30% of the product cost, up to $1500 in 2009 & 2010 for:
- Windows and Doors
- Insulation
- Roofs (Metal and Asphalt)
- HVAC
- Water Heaters (non-solar)
- Biomass Stove
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Tax credits are available
at 30% of the product cost, with no upper limit through 2016 for:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy
Systems
- Fuel Cells
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Energy Efficiency criteria will vary dependant for each product
category, so refer to the “Summary of Tax Credits for Homeowners” at the Energy Star website. |
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| For
frequently asked questions on tax incentives,
click here. |
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| Listen
to IRS Audio File for Podcast: Home
Energy Credits |
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Homeowner
Notes
- The product(s) must be "placed
in service" by December 31, 2010
- The product(s) 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 and rentals 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.
- Labor and installation costs
are not applicable.
- The product(s) must have
a Manufacturer Certification Statement to qualify. This a signed statement
from the manufacturer certifying that the product or component qualifies
for the tax credit. The IRS encourages manufacturers to provide these
Certifications on their website to facilitate identification of qualified
products. Taxpayers must keep a copy of the certification statement
for their records, but do not have to submit a copy with their tax return.
- Home 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.
More information
on tax credits for Homeowners (including forms) can be found at the
Department
of Energy Website.
Back
to Top
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Tax Credits for Home Builders
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- $2,000 tax credit for a
new energy efficient home that achieves 50% energy savings for heating
and cooling over the 2004 International Energy Conservation Code (IECC)
and supplements.
*At least 1/5 of the energy savings must come from building
envelope improvements.
- $1,000 tax credit to the
producer of a new manufactured home achieving 30% energy savings for
heating and cooling over the 2004 IECC and supplements.
*At least 1/3 of the savings must come from building
envelope improvements, or a manufactured home meeting the requirements
established by EPA under the ENERGY STAR program.
These tax credits apply to
new homes located in the United States whose construction is substantially
completed after August 8, 2005 and that are acquired from the eligible
contractor for use as a residence from January 1, 2006 through December
31, 2009.
How
to Obtain the Tax Credit
Eligible contractors need to fill out IRS Form 8908 to get the tax
credit. The IRS has provided the following guidance regarding the tax
credits for constructing energy efficient new homes available under the
Energy Policy Act of 2005:
- IRS Notice 2006-27
provides guidance for the credit for building energy efficient homes
other than manufactured homes.
- IRS Notice 2006-28
provides guidance for the credit for building energy efficient manufactured
homes.
More information on tax
credits for Home Builders (including forms) can be found at the
Department
of Energy Website.
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to Top
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Tax
Deductions for Commercial Buildings
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- $1.80 per square foot is
available to owners or designers of new or existing commercial buildings
that save at least 50% of the heating and cooling energy of a building
that meets ASHRAE Standard 90.1-2001.
- Partial deductions of up
to $.60 per square foot can be taken for measures affecting any one
of three building systems. (the building envelope, lighting, or heating
and cooling systems)
*These tax deductions are available for systems "placed
in service" from January 1, 2006 through December 31, 2013.
More information
on tax credits for Commercial buildings (including forms) can be found
at the
Department
of Energy Website.
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Disclaimer:
This page on tax credit information is presented
free of charge to provide general information on the new federal tax credit
and is not intended to be an interpretation of eligibility for the tax
credit. Please consult with a qualified tax advisor to discuss eligibility.
Most of the information was gathered and summarized from the energy star
website and other government websites.
For more information
and tax forms on this subject, visit the following sites:
Energy
Star, Internal
Revenue Service
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