On February 17th 2009, President Obama signed a
stimulus bill called "The American Recovery and Reinvestment Act of
2009" that made some significant changes to the energy efficiency tax
credits. These new changes will save homeowners who purchase Energy Star
products money!
In a statement, the chairman of NAHB Remodelers
praised Obama’s focus on remodeling and retrofitting. “Even the most
aggressive efficiency goals for new homes won’t make a dent in overall
energy consumption,” said Greg Miedema, a Tucson, Ariz., remodeler.
“Instead, remodeling and retrofitting the nation’s older homes is by far
the more efficient solution.”
Here are the highlights:
Tax credits that were previously effective
for 2009, have been extended to 2010
The tax credit has been raised from 10% to
30%
The tax credits that were for a specific
dollar amount have been converted to 30% of the cost
The maximum credit has been raised from
$500 to $1500 for 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 economic stimulus law contains billions of dollars for making
existing homes more energy efficient, including:
$5 billion to weatherize houses of
low-income families.
$2.25 billion to retrofit Section 8 housing
with energy-efficient products, including
$250 million for a program to make
HUD-sponsored, low-income housing more efficient.
$2.25 billion to help build and
rehabilitate low-income housing, including the use of green
technologies, under the HOME Investment Partnerships Program.
$510 million to improve energy efficiency
through Native American housing block grants.
$300 million to the Energy Star program and
to states for matching grants and rebates to consumers who replace
their old appliances with Energy Star-rated products.
The law also expands the following homeowner
programs:
The Existing Homes Tax Credit increases from
10% to 30% for the
cost of energy-efficient windows, HVAC equipment, and insulation, up
to $1,500 per qualifying household through 2010.
The Investment Tax Credit, a 30% credit for
solar thermal and geothermal installations,
had a cap of $2,000, which has been removed.
Likewise, the law removes the $4,000 cap on
small wind turbines.
TAX CREDITS & REBATES - How to qualify for
your tax credit
The tax credits cover 30% of the purchase price of new high-efficiency
water heaters, windows, and air conditioners, and for adding insulation,
up to a $1,500 total per household. To qualify, an item must be 15% to
20% more efficient than the standard model.
Federal Tax Credits
This bill extends and modifies the tax credits for windows, doors, and
skylights established in the Energy Policy Act of 2005.
Here's more specifications.
The following guidance is not intended as legal advice, and you should
consult a tax professional with specific questions:
To qualify for the tax credit, windows,
doors, and skylights placed in service after February 17, 2009 must
have a U-factor and Solar Heat Gain Coefficient (SHGC) less than or
equal to 0.30.
Qualifying products purchased between
February 17, 2009 and December 31, 2010 are eligible for a tax
credit equal to 30 percent of the product cost. The maximum amount
of homeowner credit for all improvements combined (including
roofing, insulation, HVAC, and water heaters) is $1,500 during 2009
and 2010.
For products purchased between January 1,
2009 and February 16, 2009, the terms of the tax credit are less
clear. The Internal Revenue Service will likely clarify these terms
in guidance documents, which are expected to be released later this
year.
Qualifying and receiving your tax credit is
easy:
Purchase a qualifying window or door
or Energy Star Appliance and save your sales receipt and the NFRC/ENERGY
STAR label with your tax documents.
Have your qualifying purchase installed
between January 1, 2009 and December 31, 2010.
Claim the tax credit associated with your
qualifying purchase on your federal filing for the 2009 and/or 2010
tax year.
In addition, the package includes $300 million
that states can use to sponsor utility rebates for the purchase of
energy-efficient appliances (also 15% to 20% more efficient than
standard) and for tax credits for installing solar panels and solar
water heaters.
If you are a low income family, earning under $32,000 per year you may
qualify for more assistance because the stimulus package includes $5
billion that is expected to help 1 million low-income families reduce
their energy costs by weatherizing their homes. Energy secretary Steven
Chu said the DOE plans to move quickly to distribute the money.
In 2008 the DOE allocated $227.2 million for its 33-year-old
Weatherization Assistance Program, which benefited 100,000 households in
2008. The money paid to upgrade low-income homes with thicker
insulation, more efficient heating and cooling systems, better air
filters, and weather-resistant windows.
With the funding increase, members of the Obama administration have
dubbed it “the largest weatherization program in history.”
The stimulus law raises the amount that can be spent per house from
$3,055 to $5,000. To qualify for the program, a family of four can
earn no more than $32,000 per year.
A well-weatherized home can save a family up to $413 on its annual energy
bills. That’s a significant savings for a low-income household, which
spends about 17% of its annual income on energy, compared with just 4%
for higher-income households that are more likely to have better
insulation and windows, estimates the federally funded Oak Ridge
National Laboratory.
What's Next? Finding an Energy Star Partner
to save you money
Special Offers and Rebates from ENERGY STAR
Partners
To encourage customers to buy energy efficient products, ENERGY STAR
partners occasionally sponsor special offers, such as sales tax
exemptions or credits, or rebates on qualified products. Partners also
occasionally sponsor recycling incentives for the proper disposal of old
products. The search below is provided as a service to consumers to find
such special offers or rebates where they exist, based on information
that partners submit to ENERGY STAR.
To find partner to help with your tax bill
credit click the link below:
To qualify for the tax
credit, windows, doors, and skylights placed in service after
February 17, 2009 must have a U-factor and Solar Heat Gain
Coefficient (SHGC) less than or equal to 0.30.
Storm Window
Meets IECC1 in combination
with the exterior window over which it is installed, for the
applicable climate zone
30% up to $1500
A Manufacturer’s Certification
is a signed statement from the manufacturer certifying that the
product or component qualifies for the tax credit. The IRS
encourages manufacturers to provide these Certifications on
their website to facilitate identification of qualified
products. Taxpayers must keep a copy of the certification
statement for their records, but do not have to submit a copy
with their tax return
Exterior Doors
U factor <= 0.30
SHGC <= 0.30
30% up to $1500
To qualify for the tax
credit, windows, doors, and skylights placed in service after
February 17, 2009 must have a U-factor and Solar Heat Gain
Coefficient (SHGC) less than or equal to 0.30.
Storm Doors
In combination with a wood
door assigned a default U-factor by the IECC1, and does not
exceed the default U-factor requirement assigned to such
combination by the IECC
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.
30% of cost
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).
