Tax Benefits & Tax Credits for Energy Efficiency Still in Effect for 2010

By
Home Inspector with Home Energy Solutions of the Triad, LLC

It is not too late to call us at Home Energy Solutions of the Triad, LLC to take full advantage of the current tax incentives available for weatherizing your home. Please call us at 1-800-724-4841 to schedule your home energy audit today!!!

 

On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits. The highlights are:

  •  
    • The tax credits that were previously effective for 2009, have been extended to 2010 as well.
    • The tax credit has been raised from 10% to 30%.
    • The tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
    • The maximum credit has been raised from $500 to $1500 for the two years (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
    • The $200 cap on windows has been removed.

Tax Credits for Consumers

A tax credit can provide significant savings. It reduces the amount of income tax you have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces the tax itself. You must refer to the final Internal Revenue Service (IRS) rules to determine what qualifies for the tax credit.

Home Improvements

Tax credits are now available for home improvements:

  •  
    • must be "placed in service" from January 1, 2009 through December 31, 2010. The IRS defines "placed in service" as "when the property is ready and available for use."
    • must be for taxpayers principal residence
    • maximum amount is $1,500 in 2009 & 2010 for most home improvements (geothermal heat pumps, solar water heaters, solar panels, fuel cells, and windmills are not subject to this cap)
    • for record keeping, save your receipts and the Manufacturer Certification Statement3, OR for windows, you can save the ENERGY STAR label from your new windows
    • improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010). Use IRS Tax Form 5695 (2009 version), which will be available late 2009 or early 2010
    • 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.

Efficient Cars

Starting January 1, 2009, there is a new tax credit for Plug-in hybrid electric vehicles, starting at $2,500 and capped at $7,500 for cars and trucks (the credit is based on the capacity of the battery system). The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).

Tax credits are available to buyers of hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles. The tax credit amount is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models. These credits are available for vehicles placed in service starting January 1, 2006. For hybrid and diesel vehicles made by each manufacturer, the credit will be phased out over 15 months starting after that manufacturer has sold 60,000 eligible vehicles. For vehicles made by manufacturers that have not reached the end of the phase-out, the credits will end for vehicles placed in service after December 31, 2010.

Solar Energy Systems

Tax credits are available for qualified solar water heating and photovoltaic systems. The credits are available for systems placed in service by December 31, 2016. The tax credit is for 30% of the cost of the system (up to $2,000 for solar water heaters). This credit is completely separate from the $1,500 home improvement credit.

Small Wind Energy Systems

Tax credits are available to homeowners who install residential small wind energy systems. The credits are available for systems placed in service by December 31, 2016. The tax credit is for 30% of the cost of the system, and is not limited to the $1,500 home improvement cap.

Fuel Cells

There is a consumer tax credit of up to 30% of the cost (up to $1,500 per 0.5 kW of capacity) for installing a qualified fuel cell and microturbine system. The credits are available for systems "placed in service" by December 31, 2016. This credit is not limited to the $1,500 home improvement cap.

SUMMARY OF TAX CREDITS FOR HOMEOWNERS

Product Category

Product Type

Tax Credit Specification

Tax Credit

Notes

Windows & Doors

Exterior Windows and Skylights

U factor <= 0.30

SHGC <= 0.30

30% of cost, up to $1,500

NOT All ENERGY STAR labeled windows and skylights qualify for tax credit.

Windows & Doors

Storm Windows

Meets IECC in combination with the exterior window over which it is installed, for the applicable climate zone

30% of cost, up to $1,5002

Manufacturer's Certification Statement will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.) that a product may be combined with to be eligible in specific climate zones.

Windows & Doors

Exterior Doors

U factor <= 0.30

SHGC <= 0.30

30% of cost, up to $1,500

NOT ALL ENERGY STAR DOORS will qualify.

Windows & Doors

Storm Doors

In combination with a wood door assigned a default U-factor by the IECC, and does not exceed the default U-factor requirement assigned to such combination by the IECC

30% of cost, up to $1,500

 

Roofing

Metal Roofs, Asphalt Roofs

ENERGY STAR qualified

30% of cost, up to $1,500

ALL ENERGY STAR labeled metal and asphalt roofs qualify for the tax credit.

Must be expected to last 5 years OR have a 2 year warranty.

Insulation

Insulation

Meets 2009 IECC & Amendments

30% of cost, up to $1,500

For insulation to qualify, its primary purpose must be to insulate. (example: vapor retarders are covered, siding does not qualify).

Must be expected to last 5 years OR have a 2 year warranty

HVAC

Central A/C

Split systems:
EER >=13
SEER >= 16

Package systems:
EER >= 12
SEER >= 14

30% of cost, up to $1,500

For a list of qualified products, go to the Consortium for Energy Efficiency product directory, click on the Air Conditioners, and in the "CEE Tier" enter "Residential Advanced Tier 3".

Note: NOT ALL ENERGY STAR products will qualify for the tax credit.

ENERGY STAR specification:
Split systems:
EER >= 12
SEER >= 14.5

Package systems:
EER >= 11
SEER >= 14

HVAC

Air Source Heat Pumps

Split systems
HSPF >= 8.5
EER >= 12.5
SEER >= 15

Package systems
HSPF >= 8
EER >= 12
SEER >= 14

30% of cost, up to $1,500

Note: NOT ALL ENERGY STAR products will qualify for the tax credit.

ENERGY STAR specification:
Split systems:
HSPF >= 8.2
EER >= 12
SEER >= 14.5

Package systems:
HSPF >= 8
EER >= 11
SEER >= 14

HVAC

Natural Gas or Propane Furnace

AFUE >=95

30% of cost, up to $1,500

For a list of qualifying products go to the Gas Appliance Manufacturing Association

Note: NOT ALL ENERGY STAR products will qualify for the tax credit.

ENERGY STAR Specification:

Gas Furnaces: AFUE >= 90

Oil Furnaces: AFUE >= 85

Boilers: AFUE >= 85

HVAC

Oil Furnace

AFUE >= 90

30% of cost, up to $1,500

HVAC

Gas, Propane, or Oil Hot Water Boiler

AFUE >= 90

30% of cost, up to $1,500

HVAC

Advanced Main Air Circulating Fan

No more than 2% of furnace total energy use

30% of cost, up to $1,500

For a partial list of qualifying products go to the Gas Appliance Manufacturing Association

Geo-Thermal Heat Pump

Geo-Thermal Heat Pump

Same criteria as ENERGY STAR:

Closed Loop:
EER >= 14.1
COP >= 3.3

Open Loop:
EER >= 16.2
COP >= 3.6

Direct Expansion:
EER >= 15
COP >= 3.5

30% of the cost - NOT subject to $1,500 cap

All ENERGY STAR labeled geo-thermal heat pumps qualify for the tax credit.

UseIRS Form 5695

Must be "placed into service" between Jan. 1, 2008 - Dec. 31, 2016.

Water Heaters

Gas, Oil, Propane Water Heater

Energy Factor >= 0.82 or a thermal efficiency of at least 90%.

30% of cost, up to $1,500

Note: NOT ALL ENERGY STAR gas storage and gas condensing water heaters will qualify for the tax credit. ALL ENERGY STAR gas tankless models will qualify.

ENERGY STAR criteria:

Gas Storage:
Energy Factor >= 0.62

Gas Tankless:
Energy Factor >= 0.82

Gas Condensing:
Energy Factor >= 0.8

For a partial list of qualifying products go to the Gas Appliance Manufacturing Association

Water Heaters

Electric Heat Pump Water Heater

Same criteria as ENERGY STAR: Energy Factor >= 2.0

30% of cost, up to $1,500

All ENERGY STAR qualified electric heat pump water heaters qualify for the tax credit.

Biomass Stove

Biomass Stove

Stove which burns biomass fuel to heat a home or heat water.

Thermal efficiency rating of at least 75% as measured using a lower heating value.

30% of cost, up to $1,500

 

Solar Energy Systems

Solar Water Heating

  • At least half of the energy generated by the "qualifying property" must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.
  • The credit is not available for expenses for swimming pools or hot tubs.
  • The water must be used in the dwelling.
  • The system must be certified by the Solar Rating and Certification Corporation (SRCC).

30% of cost, up to $2,000

  • Use IRS Form 5695 
  • Must be "placed in service" before December 31, 2016.

Solar Energy Systems

Photovoltaic Systems

Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

30% of cost

  • Use IRS Form 5695 
  • Must be "placed in service" before December 31, 2016.

Small Wind Energy Systems

Residential Small Wind Energy Systems

 

30% of the cost

Must be "placed in service" by December 31, 2016.

Use IRS Tax Form 5695 (version 2009). This form should be available in late 2009 or early 2010.

Not limited to $1,500 cap.

Fuel Cells

Residential Fuel Cell and microturbine system

Efficiency of at least 30% and must have a capacity of at least 0.5 kW.

30% of the cost, up to $1,500 per 0.5 kW of power capacity

  • Must be "placed in service" by December 31, 2016.
  • Use IRS Tax Form 5695 (version 2009). This form should be available in late 2009 or early 2010.
  • Not limited to $1,500 cap.

Cars

Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles

 

Based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models

There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Toyota and Honda have already been phased out. Credit is still available for Ford, GM and Nissan.

For more information visit: Fueleconomy.gov

  • Use IRS Form 8910 for hybrid vehicles purchased for personal use.
  • Use IRS Form 3800 for hybrid vehicles purchased for business purposes.

Cars

Plug-in hybrid electric vehicles

 

$2,500-$7,500

The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).

Effective January 1, 2009.

 

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John...Awesom e post on the envergy tax savings !!!!

Thanks Gary D for Denver

Jan 10, 2010 04:30 PM #1
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