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Msnbc.com's Bill Dedman writes:
Taxpayers have only until the end of the year to qualify for a $1,500 federal tax credit for new windows, insulation and other home energy improvements. The credit can reduce a tax bill by 30 percent of purchases up to $5,000, for a maximum saving of $1,500 per home.
Eligible products for 2010 include certain exterior doors and windows, skylights, water heaters, central air conditioners, electric heat pumps, furnaces, boilers, air circulating fans, insulation, roofing materials.
A separate list of products can be purchased through 2016: geothermal heat pumps, solar electric and solar water heating units, wind energy systems, residential fuel cell systems.
The deadline: The products need to be placed in service by Dec. 31, meaning they have to be installed before the New Year begins, not just purchased by then.
Other limitations: The products have to be used in a primary residence, which can be a new or existing home. If you used the full $1,500 tax credit in 2009, you cannot use it again in 2010. And there's only one $1,500 credit, not a separate credit for each item: If you use it for windows, you can't use it again for insulation.
Although Congress, in its recent extension of the Bush-era tax cuts, extended this program until 2011, it also capped the program for 2011 at $500. And only 10 percent of the cost of improvements is covered, so this next week remains the last chance to qualify for the $1,500. The new $500 limit is also a "lifetime" limit, meaning anyone who took advantage of $500 of more since the beginning of 2006 can't use any of the $500 next year. There are other restrictions as well, such as a $200 limit for windows.
Details on the current program are here.
Related links: Energystar.org, for eligibility requirements, products and limitations.
Dsireusa.org, the Database of State Incentives for Renewables and Efficiency, lists other state and local programs.
Energytaxincentives.org, the Tax Incentives Assistance Project helps taxpayers take advantage of the tax credits.
This page has details on changes in the program for 2011.
Leave a Comment:
There's a real good reason standard heating an air conditioning credits are ending...it's because geothermal heating and cooling implementation alone will eliminate the need for new power plants and generation facilities for quite a while, maybe decades. The average home retrofit reduces energy consumption on the order of 52% for the entire home. We're absolutely covered up with work in the geothermal HVAC field right now...and thank goodness. Finally a technology that helps the guy paying the electric bill as well as putting all of the other trades back to work. McGraw Hill's new book has all the facts; "Geothermal HVAC, Green Heating and Cooling" Google 'Geothermal book'.
Wow, could the 2011 extension be any more confusing?
James, yep, it is confusing. I hope my description didn't confuse you further. In short: the tax credit has been severely curtailed.
This page gives a full description of the changes:
http://energytaxincentives.org/consumers/heating-cooling.php
Sounds like basically you can claim 10% of certain improvements in 2011 up to $500, only $200 of which can be from windows, $150 from a furnace, $300 from a water heater, etc. But if you claimed any of this credit between 2006 and 2010, for 2011 you can only claim up to $500 minus what you already claimed in those prior years. So if you already claimed $500 or more, you don't get any more credit.
Phew!
Not to mention that the 10% applies only to materials and not labor.
While the energy efficiency tax credits have been reduced for conventional HVAC systems for homes, the renewable tax credits remain in effect through 2016.
A geothermal heat pump (GHP) is classified as a renewable and continues to receive an uncapped 30% tax credit for homeowners. A GHP can show positive cash flow for homeowners and has a life expectancy twice that of a furnace or air-conditioner.