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How to apply for up to $1,500 in federal income tax credits
Posted on 10. Jul, 2009 by GMS Editor in Berkeley
Make energy efficiency improvements, as seen in our video guides, and get valuable credits that will be subtracted from the taxes you owe.
The Obama Administration’s new stimulus bill has extended and tripled the dollars you can get in federal tax credits for energy efficiency improvements you complete to your main home in each of the years 2009 and 2010.
Here’s how the tax credit works:
1. When you complete your improvements, be sure to save all the invoices and sales documents for the materials and installation, including the Manufacturer Certification Statement.**
2. When you file your taxes for 2009, obtain the correct form from the IRS (the forms will be available in late 2009 or early 2010). When you fill out the form, you will enter the amount you paid multiplied times 30% which is the amount of cost allowed. Complete the form and submit it with your Federal Income Tax Return. You cannot apply for more than $1,500 in credits for all the improvements you complete.
3. Whether you itemize your deductions or not, you will receive a credit for the amount you have submitted, which will be subtracted from any ordinary income tax that you owe. If your federal tax credit exceeds how much tax you owe, you may carry forward the excess amount to the next tax year.
See specific improvements eligible for tax credits below.
SEAL AND INSULATE – Applicable tax credits on materials
Windows and Doors
Qualifying factors — Exterior windows and doors must have a U factor and SHGC equal to or less than 0.30.
Storm windows and doors must meet IECC model energy codes++, in combination with the windows/doors over which they are fitted. Not all ENERGY STAR products qualify for this credit.
Credit amount — Exterior windows and skylights, storm windows, exterior doors and storm doors: 30% of cost.
Window Films may also qualify if the manufacturer certifies that the specific window film meets insulation requirements and includes a certification statement.
Insulation
Qualifying factors — meet the 2009 IECC energy codes and be expected to last five years or have a two-year warranty.
Credit amount – 30% of cost
Sealing home envelope cracks and ducts
Qualifying factors – meet 2009 IECC codes.
Credit amount – 30% of cost
HEATING AND COOLING – Applicable tax credits on new equipment
Central A/C
Qualifying factors – Split systems: EER >=13, SEER >= 16; package systems: EER >=12, SEER >= 14. Not all ENERGY STAR products qualify for this credit.
Credit amount – 30% of cost
Air Source Heat Pumps
Qualifying factors – Split systems: HSPF >= 8.5, EER >= 12.5, SEER >= 15; Package systems: SPF >= 8, EER >= 12, SEER >= 14.
Credit amount – 30% of cost
Furnaces
Qualifying factors – Natural gas or propane furnace: AFUE >= 95; oil furnace: AFUE >= 95. Not all ENERGY STAR products qualify for this credit.
Credit amount – 30% of cost
Boilers
Qualifying factors – AFUE >= 90
Credit amount – 30% of cost
Fans for Heating and Cooling Systems
Qualifying factors – No more than 2% of furnace total energy use
Credit amount – 30% of cost
Biomass Stoves
Qualifying factors – Thermal efficiency rating of at least 75% as measured using a lower heating value.
Credit amount – 30% of cost
**What is a Manufacturer Certification Statement and how do you find it.
This is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Manufacturers provide these certifications on their website to help identify qualified products and you should also be able to get them from the retailer when you purchase the materials. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
++What are the IECC’s energy codes.
The International Energy Conservation Code set standards for building materials and structures, and updates these periodically. The retailer or manufacturer where you purchase these items should be able to identify if they qualify for the credits and provide the code information as part of your purchase.
For Tax Credits on Renewable Energy installations
Find the latest information on solar, wind and geothermal heat pumps at:
http://www.energytaxincentives.org/business/renewables.php
