Tuesday, April 7, 2009

Remodeling Tax Credit For Homeowners

A little known part of the Economic Stimulus Package is a tax credit for homeowners who make their properties more energy efficient. The current version of the tax credit is a “sweetened” version of an initial remodeling credit introduced last fall.

Under the old remodeling credit, which was part of the economic rescue package enacted last fall, homeowners could claim a credit equal to 10% of the cost of energy-efficient windows, doors, roofing, insulation, furnaces, air-conditioning systems and heat pumps. They could claim 10% of the cost of each product, up to a lifetime cap of $500.

Remodelers maintained that the energy credit wasn't sufficient to persuade owners to make upgrades.

So Congress upped the ante, raising the per-item credit to 30% of the cost and boosting the lifetime ceiling to $1,500. It also extended the deadline for making the improvements to the end of 2010.

The stimulus package also expanded the list of permissible improvements by including solar-energy panels and water heaters, geothermal heat pumps, small wind-energy systems and fuel cells. Moreover, while the 30% credit applies to the added products, there is no cap on their cost, and the credit is available through 2016. [Los Angeles Times]

Get those Energy Star appliances – it’s on Uncle Sam!