Energy Efficiency Tax Credit for 2009
There's never been a better time to improve the energy efficieny of your home. During 2009/2010, you can recover part of your investment by:
- Lowering your energy bills now and every year after
- Save up to $1,500 on your tax bill.
The American Recovery and Reinvestment Act of 2009 establishes tax credits for many energy efficiency improvements to your home. Homeowners may claim up to 30% of costs of all equipment purchased during the aggregate two-year period of 2009 and 2010, up to $1,500 total.
Tax credits for installations made in 2006 and 2007 are still limited to the previous law’s $500. Purchase made in 2008 is not eligible for this tax credit.
Eligible Improvements
Owners of existing homes can qualify for a tax credit worth 30% of the cost of energy efficieent upgrades to their home. Cost includes labor for installation. The energy improvements below qualify for the tax credit:
- Installation of improved insulation materials and system
- Exterior doors and windows (including skylights)
- Roofs (metal and asphalt) with cooling technology
- Electric heat pumps
- Central air conditioners
- Natural gas, propane or oil water heaters
- Natural gas, propane or oil furnace or hot water boilers
- Electric heat pump water heaters
- Biomass stoves that use renewable plant-derived fuels
The Energy Efficiency Tax Credit eligibility performance and quality standards vary by technology chosen. Visit the Energy Star web site for detailed information on products that qualify. Click here for complete details on the Residential Energy Efficiency Tax Credit (Source: DSIRE)
What is a Tax Credit?
The difference between a tax credit and a tax deduction is very important. A tax credit is worth more then a tax deduction. A tax credit comes directly off your total tax liability. While a tax deduction just reduces your taxable income before the tax liability is calculated. The bottonline is you save substantially more with a credit.