Federal Tax Credits are Now Available for Certain Home Improvements:
- Must be "placed in service" from January 1, 2009 through December 31, 2010
- Must be for taxpayer's principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify)
- $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
- Must have a Manufacturer Certification Statement1 to qualify
- For record keeping, save your receipts and the Manufacturer Certification Statement
- Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) - use IRS Tax Form 5695 (2009 version) - it will be available late 2009 or early 2010
- If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.
Summary of Tax Credits for Homeowners
| Product Type | Tax Credit Specification | Tax Credit |
Notes |
| Natural Gas or Propane Furnace | AFUE >= 95 | 30% of cost, up to $1,5002 | Partial list of qualifying products: Air-Conditioning, Heating, Refrigeration Institute (AHRI).
Not all ENERGY STAR products will qualify for the tax credit. ENERGY STAR criteria for furnaces and boilers |
| Gas Water Heater | Energy Factor >= 0.82 or a thermal efficiency | 30% of cost, up to $1,5002 | All ENERGY STAR gas tankless water heaters will qualify.
There are currently no ENERGY STAR qualified gas storage tank or gas condensing water heaters that qualify. ENERGY STAR criteria for water heaters Partial list of qualifying products: Air-Conditioning, Heating, Refrigeration Institute (AHRI) |
1 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.
2 Subject to a $1,500 maximum per homeowner for all improvements combined.
The IRS defines "placed in service" as when the property is ready and available for use.
All information above is taken from energystar.gov/taxcredits. For full details, please click the link to visit that site.
