subject: Weatherizing Tax Credit [print this page] According to the IRS there are tax credits available as well as obvious energy savings for those who weatherize their homes this year. People who make an effort to make their homes more energy-efficient are not only saving the environment, they are saving money.
This came to pass in the Recovery Act put into place this year. It expands two at home tax credits relative to energy savings, the non-business energy property credit and the residential energy efficient property credit.
The non-business energy property credit is 30% of what a homeowner spends on eligible weatherization improvements. However, the total tax credit can only add up to $1,500 for both the 2009 and 2010 tax years. There is no limit to the amount you can save on your home energy bills though.
What applies to this credit then? There are high-efficiency air conditioning systems and units, water heaters, and stoves that burn biomass that all qualify for the credit. Labor costs for installing these systems can all be added as well.
Additionally, according to the IRS, the cost of energy-efficient windows, skylights, doors, certain insulation and roofs also qualify for the credit. However, none of these items qualify for the installation credit.
As for the residential energy efficient property credit, it is also 30% of what the homeowner spends on qualifying property. Some of these systems include solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cells.
On these types of upgrades there is no cap to the tax credit you can receive except on the fuel cells. However, not all energy-efficient upgrades qualify for this credit, so you should check with the manufacturer before purchasing or installing any of these upgrades.
In order to do this, you can check the manufacturer's certification statement. This certification can usually be found on the website or with the packaging of the product.
The IRS reminds you to keep in mind that the manufacturer's certification statement is different than the Department of Energy's Energy Star label which means that not all Energy Star products qualify for the credit.
Homeowners can claim both of these credits when filing their 2009 income tax return. It is important to remember that these are tax credits, not deductions. They will increase the tax payer's refund or reduce the tax that he or she owes.
The eligible homeowners can claim both of these credits regardless of whether he or she itemizes deductions on the Schedule A tax form. A draft version of the form used to claim these credits is available on the IRS website so that you can figure and claim your credits.
Do not forget that taxes are due on April 15, 2010 for the 2009 tax year. Late and delinquent tax payers will be pursued by the IRS.
It is also important to remember that the tax credits mentioned above can only be claimed by homeowners, not business owners, and that windows and skylights purchased before June 2009 may only have the Energy Star labels on them, as the new guidelines were not released until after that date.
Manufacturers have been instructed not to include the updated certificate with any product or property that does not meet the updated guidelines and therefore anything purchased with the updated certificate should be eligible for the credit.
