Federal Tax Credits for Energy Efficiency
On October 3, 2008, President Bush signed into law the “Emergency Economic Stabilization Act of 2008.” This bill extended tax credits for energy efficient home improvements (windows, doors, roofs, insulation, HVAC, and non-solar water heaters). Tax credits for these residential products, which had expired at the end of 2007, will now be available for improvements made during 2009. However, improvements made during 2008 are not eligible for a tax credit.
The bill also extended tax credits for solar energy systems and fuel cells to 2016. New tax credits were established for small wind energy systems and plug-in hybrid electric vehicles. Tax credits for builders of new energy efficient homes and tax deductions for owners and designers of energy efficient commercial buildings were also extended.
Federal Tax Credits for Energy Efficiency includes:
- Tax Credits for Consumers
- Home Improvements
- Windows and Doors
- Insulation
- HVAC
- Water Heaters
- Biomass Stoves
- Cars
- Solar Energy Systems
- Small Wind Energy Systems
- Fuel Cells
- Tax Credits for Home Builders
- Tax Deductions for Commercial Buildings
- For More Information
**Please note, not all Energy Star qualified homes and products qualify for a tax credit. These tax credits are available for a number of products at the highest efficiency levels, which typically cost much more than standard products. If, for whatever reason, you decide not to purchase a product covered by the tax credit, you may still consider purchasing an Energy Star product. Energy Star distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, without a tax credit.
Tax Credits for Consumers:
Home Improvements
Home improvement tax credits are now available for home improvements “placed in service” from January 1, 2009 through December 31, 2009. Any qualified home improvements made in 2008 are not eligible for the tax credit.
Home improvement tax credits are available for insulation, replacement windows, water heaters, certain high efficiency heating and cooling equipment, and biomass stoves. (See chart.) The maximum amount that a taxpayer may claim from all of these tax credits combined is $500 over the lifetime of the tax credit (2006, 2007 & 2009).
If you are building a new home, you can qualify for the tax credit for photovoltaics, solar water heaters, small wind systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters. More.
The Internal Revenue Service (IRS) guidance for consumers: IRS Notice 2006-26 