Working Through The Feds Energy Tax Credits…It is going to be a long couple of weeks

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Let me start out with the statement: I AM NOT AND NEVER SHALL BE A TAX ACCOUNTANT. If you read anything here and apply it to your taxes without consulting one you are taking your life in your own hands. I will give you an example. My wife and I put a Metal Roof on our house last year. When we went to claim it on our taxes..WE Couldn’t!! Those crafty Bush people made it so the credits skipped every year…so they were effective in 2007 and 2009 but NOT 2008. God, I am so glad those people are gone.

So lets start with the frequently asked quests and go from there.

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How has the new Stimulus bill affected the tax credits for energy efficient home improvements?
  Answer
 

On February 17, 2009, President Obama signed the “Stimulus Bill” (The American Recovery and Reinvestment Act of 2009) that made significant changes to the energy efficiency tax credits. These changes apply to products ” placed in service” in 2009. The highlights are:

  • The tax credits that were previously effective for 2009, have been extended to 2010 as well.
  • The tax credit has been raised from 10% to 30%.
  • The tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
  • The maximum credit has been raised from $500 to $1,500 total for the two year period (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 $200 cap on windows has been removed, but the requirements for windows (after June 1, 2009) has been increased significantly. Not all ENERGY STAR qualified windows will qualify after June 1, 2009.

Specific information on what is covered by the tax credits.

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What was available last year? (OH if only I had checked)

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  What tax credits were available in 2008 for energy efficiency home improvements?
  Question
 

What tax credits were available in 2008 for energy efficiency home improvements?
  Answer
 

The only energy efficiency improvements that are eligible for a tax credit in 2008 are:

  • geothermal heat pumps (30%, up to $2,000)
  • solar water heaters (30%, up to $2,000)
  • solar panels (30%, up to $2,000)
  • small wind energy systems (30%, up to $4,000)
  • fuel cells (30%, up to $500 per .5 kW of power capacity)

You need to file IRS Tax Form 5695 with your 2008 taxes to claim this credit.

Tax credits for windows, doors, insulation, HVAC, and non-solar water heaters (that were available in 2006 & 2007) are NOT available for products installed in 2008, but they are again eligible for products installed in 2009 and 2010.

More information on the tax credits for 2009 and beyond.

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What does your handyman get? Blisters hahahaha

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  Are installation costs covered by the tax credits?
  Question
  Are installation costs covered by the tax credits?
  Answer
 

Installation costs ARE COVERED for:

  • HVAC (Heating, Ventilation and Air Conditioning) systems
  • Biomass Stoves
  • Water Heaters (including solar)
  • Solar Panels
  • Geothermal Heat Pumps
  • Wind Energy Systems
  • Fuel Cells

The tax credit for HVAC, biomass stoves, and non-solar water heaters is 30% of the total cost (product + installation) up to $1,500. The law specifies installation costs include: “expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property.”

The tax credit for solar water heaters, solar panels, geothermal heat pumps, wind energy systems, and fuel cells* is 30% of the total cost (product + installation), with no upper limit. The law specifies installation costs include: “labor costs properly allocable to the onsite preparation, assembly, or original installation of the property and for piping or wiring to interconnect such property to the home.”

Installation costs are NOT covered by the tax credit for:

  • Windows
  • Doors
  • Insulation
  • Roofs

The tax credit for windows, doors, insulation and roofs is for 30% of the cost of materials only, up to $1,500.  Read this FAQ on separating out the cost of installation for these products.

Learn more at: energystar.gov/taxcredits

*The tax credit for fuel cells is 30% of the cost, but limited to $500 per .5 kW of power capacity

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Got other questions? Of course you do it is the IRS after all

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Tomorrow – Doors and Windows…I can hardly wait. Oh and if you want this work done and you live in New York you might try:

http://www.remodeling-ny.com/

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1 thought on “Working Through The Feds Energy Tax Credits…It is going to be a long couple of weeks”

  1. Pingback: Gain a tax break for going Green | Gadget Look

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