Tax Credits For Home Projects
As reported in the Wall Street Journal, the federal government is offering financial incentives in the form of tax credits. These credits can be claimed on a homeowner’s 2009-2010 income tax returns in the year the improvements were made. With a tax credit, the amount is deducted from any taxes you may owe to the federal government.
Also, the credit is nonrefundable, meaning it allows taxpayers to lower their tax liability to zero, but not below zero, according to the IRS.
These are a few of the tax credits being offered:
Upgrade your insulation, windows, doors roofing, heating & air conditioning and qualify for up to 30% of the purchase price of the product – up to a $1,500 maximum credit. We’ve all seen the ads in the newspapers, save your receipts and use the tax credit. To qualify, you must place those purchases between January 1st 2009-December 31st, 2010.
Only improvements made to your principal residence qualify. For more details visit The Environmental Protection Agency’s Energy Star program website at www.energystar.gov/taxcredits.
It should be noted that credits for these improvements are available through 2016, but you must claim them for the tax year in which you made the purchase.
Installation of these products is not always included under the federal tax credit. For example, installation costs for heating and cooling systems and some other higher-cost improvements qualify according to the Energy Star site but installation of windows, insulation doors and roofs does not qualify.
If you are building a home, the tax credit rules are different. You may qualify for some of the upgrades including go-thermal pumps, solar panels, small wind-energy systems and fuels cells, but you will not get a tax credit for the purchase of windows, door, insulation or roof.
Be sure to obtain the Manufacturer Certification Statement, a signed statement from the manufacturer that indicates the produce qualifies for the tax credit.
