Energy Efficiency Federal Tax Credits
You’ve heard me speak recently about the tax credits that
the federal government is currently offering to homeowners for upgrading their
insulation. What doesn’t get a lot of
attention is the other home improvements that also get you money back come
April 15th. Below I’ve listed
the important information you need to know about when, what, and how much:
Deadline: Home improvement projects must be installed and complete by December 31, 2010 – 28 days and counting!
Which houses qualify: You may only take these credits on
your principal residence that has already been built. New construction homes and rental properties
do not qualify for these credits.
What home improvements qualify:
- Insulation – Bulk insulation such as batting, rolls,
blown-in, expanding spray, or pour-in-place or products that seal air to reduce
leaks (that come with a Manufacturers Certification Statement) such as weather
stripping, spray foam in a can, caulk or house wrap. I discuss more about winterizing your home
in a guest blog post a few weeks back.
- Windows & Doors – Replacement windows and doors much
have a maximum U-Factor of no more than 0.30 and must have a maximum SHGC of no
more than 0.30. The U-Factor is a
measurement of how well the particular window, door or skylight prevents heat
from escaping, similar to the R-Value for insulation. The lower the number is, the more efficient
the window, with ratings ranging from 0.20 to 1.20. The Solar Heat Gain Coefficient, or SHGC, is
a measurement of how well the unit blocks heat from sunlight, with the lower
the numbers meaning less heat gain through the unit. These ratings range from 0 to 1.0.
- Water Heaters – Replacement gas, oil or propane water
heaters must have an Energy Factor greater than or equal to 0.82, or a Thermal
Efficiency of at least 90%. Replacement
electric heat pump water heaters must have an Energy Factor of at least 2.0.
- HVAC Systems – Many different options exist for the
replacement of HVAC equipment, including central air conditioning, hot water
boilers, natural gas or propane furnaces, oil furnaces, etc. If you are interested in upgrading your HVAC
systems, a great local HVAC company like Gainesville Mechanical can
educate you as to your options for qualifying for this credit.
The Fine Print: Many remodelers and contractors will not
tell you the whole story on the actual tax credit savings for the sake of
selling a project. I feel that it’s
important to let the homeowner know exactly what they are getting to make the
most educated choice possible. Two of
the sticking points of this tax credit that often go unnoticed until tax time are:
- You only see a credit on 30% of the cost of these
improvements up to a maximum of $1,500, and
- The tax credits to not include the cost for installation.
Despite the fact that the cost for installation does not
give you an immediate savings on your tax bill, in the long run you will see
greater savings on your energy bill for proper, professional installation. These tax credits are certainly prompting
many homeowners to make those improvements that they’ve been putting off for a
while. If you would like a free estimate
on a project for your home and an analysis on how much it will save you,
contact us today. The clock is ticking!