Unless you’ve been living under a rock, you’ve heard of the energy tax credit that’s in place for homeowners who make energy efficient purchases for their home. And, this energy tax credit has been extended until December 31, 2010, which means that now is your last chance to make these changes to your home. While the term “tax credit” may sound familiar, not many people know what this credit actually entails.
The important thing to remember is that energy-efficient upgrades and appliances may be eligible for the tax credit, so be sure that you do your homework before assuming that the product qualifies. Examples of such upgrades to the home include biomass stoves, roof tops, HVAC systems, insulation, water heaters, windows, doors, and skylights. There are also tax credits for energy efficient vehicles, as well as wind energy and solar energy systems that are eligible until 2016.
Also of importance is that eligible products are credited up to 30% of the cost and $1500 is the maximum limit for all efficiency measures during the course of the 2009-2010 periods. So yes – you won’t want to go crazy and replace everything in the home – there is a limit. Also, the product must be installed in the primary residence and an existing home; new homes or secondary homes don’t count.
All in all, the energy tax credit program is designed to reward those who make smart upgrades to the home that will in turn save energy and cost in the long run. Since these products often cost more on the front-end, the tax credit is designed to take care of that higher initial cost. Just make sure that the purchase is made before the end of this year, save receipts, and claim it on 2010 taxes in April.
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