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Go green, save some green
Posted on 14. Sep, 2009 by GMS Editor in Newsflash, ShowOnLatestPanel
Friday, September 11, 2009
Glenn Haege: cover story
This time of year, many homeowners are thinking about making energy-efficient home improvements to help them save money on their energy bills. But you may not realize that you also can qualify for state and federal tax credits, along with rebates from your utility company, for some of these home improvements.
However, finding out what you need to do to qualify can be time-consuming. That’s why I am going to help you wade through the maze of tax credits and rebates so you can get all the credit you deserve when making home improvements this fall.
“A tax credit is actually better for a taxpayer than a tax reduction because it reduces your tax bill on a dollar-for-dollar basis for the amount of the credit, whereas a deduction only reduces the amount of income taxed,” says Jonathan Goldberg, an attorney and CPA at Bloom Asset Management in Farmington Hills. “But for most energy-efficient home improvement products, homeowners can only get a maximum credit of up to 30 percent of the qualifying expenditures, with an overall $1,500 limit over the two-year period of 2009 and 2010.”
Products that are eligible for a tax credit of up to $1,500 maximum include windows and doors, insulation, roofs, furnaces, boilers, central air conditioners, air-source heat pumps, nonsolar water heaters and biomass stoves. The home must be your principal residence and these credits are not available for new construction.
In addition to the cost of the products, installation costs are also covered for heating, ventilation and air-conditioning systems, biomass stoves, water heaters, solar panels, geothermal heat pumps, wind energy systems and fuel cells. Installation is not covered for windows, doors, insulation or roofs.
But remember, the tax credits are designed to improve energy efficiency, so the products must meet certain energy efficiency guidelines. For example, exterior windows installed before June 1, 2009 must meet Energy Star criteria, but if they are installed after June 1, 2009, they must have a U-factor of equal to or less than 0.30. A natural gas furnace must have an Annual Fuel Utilization Efficiency (AFUE) rating of equal to or more than 95.
Obviously, the cost for most products with a higher energy efficiency rating usually is higher than a less efficient product, so homeowners will have to determine if the added cost is worth it.
