Enjoy Tax Credits For Energy Conservation

posted: May 25, 2010

Who knew that conserving energy in the home can be so very beneficial financially?

If you made a purchase in 2009 or are planning to make one in 2010 of an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit. Related purchases made last year can be claimed on your 2009 federal tax return while related work completed this year can be claimed for 2010.

Stimulus Funds

The U.S. Department of Energy is behind many of the tax credits, some of which were put in place when that massive $787 billion stimulus package was passed in 2009.

The maximum tax credit you can receive is 30 percent or $1500 which can be realized by purchasing $5000 in eligible products through December 31, 2010. That is a cumulative amount too; you cannot claim $1500 in both years.

What sort of energy saving products qualify

Quite a few including:

• Biomass Stoves: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.
• HVAC: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.
• Insulation: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.
• Roofing: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.
• Non-solar Water Heaters: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.
• Windows and Doors: 30% of cost, up to $1,500 For 2009 and 2010 only; and for primary residences and existing homes only.

There are several tax credits

that have been put in place through 2016, some of which have no upper limit:

• Geothermal Heat Pump: 30% of cost, with no upper limit. Must be “placed in service” by Dec. 31, 2016. For primary residences, however vacation homes eligible for partial credit; no rentals. For both new and existing homes
• Solar Energy Systems: 30% of cost, with no upper limit. Must be “placed in service” by Dec. 31, 2016. For primary residences, however vacation homes eligible for partial credit; no rentals. For both new and existing homes
• Wind Energy Systems: 30% of cost, with no upper limit. Must be "placed in service" by Dec. 31, 2016. For primary residences, however vacation homes eligible for partial credit; no rentals. For both new and existing homes.
• Fuel Cells: 30% of cost, up to $500 per .5 kW of power capacity. Must be "placed in service" by Dec. 31, 2016. For primary residence; new and existing homes.

Lastly, there are certain tax credits for people who buy energy efficient passenger vehicles including battery electric, hybrid, and certain diesel models. Visit fueleconomy.gov for details.