Monday, November 15, 2010

Get Credit for Doing Something Good

If you’ve made energy efficient upgrades to your home in the last two years you may be able to receive a tax credit for 30% of the cost of upgrades (up to a maximum credit of $1,500). Here are the general ins and outs of the credit:
  • If you already claimed the $1,500 maximum credit on your 2009 taxes, you cannot receive the credit again in 2010--no matter how energy efficient you’ve been in 2010.
  • All upgrades need to be purchased and installed by December 31, 2010.
  • Energy efficient upgrades such as windows, doors, water heaters, heating systems, insulation, air sealing materials, air conditioners and biomass stoves are included.
  • Not all Energy Star products are eligible.
  • Rental units and new homes do not qualify for this credit; it just pertains to an existing home that is considered your primary residence.
  • You can claim installation costs on certain upgrades, such as furnace installation, but you will need to check the Energy Star website to see which ones they are. From memory, I can tell you that installation costs are not covered for insulation, air sealing, windows and doors.
  • You can do the work yourself and still get the tax credit; however, you can’t factor your installation costs into the credit.
  • Last but not least, if you don’t pay Federal taxes, you cannot take advantage of the tax credit.
To receive the credit, fill out IRS form 5695 and submit it with your 2010 Federal Income Taxes. Make sure you save your receipts (itemized with installation costs separated) and the Manufacturers Certification Statement (most can be found online) in case you get audited (knock on wood that that never happens!).

Click here to find out more.

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