CIBC Group, LLC | Business Consultants


Energy Credits Available by Winterizing Home
Winter is fastly approaching and time to winterize your home before it's too late to claim a credit on energy-saving improvements.  You can now weatherize your home and be rewarded for doing so.  By making energy-saving improvements now, you can cut your winter heating bills and lower your 2009 tax bill as well. 

The American Recovery and Reinvestment Act enacted earlier this year expanded two home energy tax credits:  the nonbusiness energy property credit and the residential energy efficient property credit.

Nonbusiness Energy Property Credit

This credit equals 30% of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years.  The cost of certain high-efficienty heating and air conditioning systems,  water heaters and stoves that burn biomass all qualify, along with labor 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 for the credit, though the cost of installing these items does not count.

Residential Energy Efficient Property Credit

Homeowners going green should also check a second tax credit designed to spur investment in alternative energy equipment.  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 this credit.  Also, no cap exists on the amount of credit available except in the case of fuel cell property.

Not all energy-efficient improvements qualify for these tax credits.  For that reason, homeowners should check the manufacturer's tax credit certification statement before purchasing or installing any of these improvements. 

Eligible homeowners can claim both of these credits when they file their 2009 federal income tax return.  Because these are credits, not deductions, they increase the taxpayer's refund or reduce the tax he or she owes. 

If you have any questions regarding an energy-saving credit, please contact our office.
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