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November 10, 2010

Energy Tax Credits

People can now weatherize their homes and get energy tax credits. The nonbusiness energy property credit equals 30% of what a homeowner spends on eligible energy saving improvements up to a maximum tax credit of $1500 for the 2009 and 2010 tax years. The cost of high efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify together witht the costs for installing these items. In addition, the cost of energy efficient windows and skylights, energy efficient doors, qualifying insulation and certain roofs also qualify. However, the cost of installing these items does not count.

Homeowners going green also have another tax credit they can take. The residential energy efficient property credit equals 30% of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines and fuel cell property. Generally labor costs are included when calculating the credit. Also, except for fuel cell property there are no caps on the amount of the credit.

Not all energy efficient improvements qualify for these tax credits. Homeowners should check the manufacturer's tax credit certification statement before purchasing or installing any of these improvements. The certification statement can be found on the product package or on the manufacturer's website. The manufacturer's certification is different from the Department of Energy's Energy Star label and not all Energy Star labeled products qualfiy for the tax credits.