Homeowners get tax credit for energy efficient home improvements

Homeowners can now benefit even more from President Barack Obama’s Stimulus Bill by making their homes more energy efficient. The American Recovery and Reinvestment Act signed last month by Obama is giving incentives through tax credits to homeowners who choose to make their homes more energy efficient. The bill not only extended previous tax credits for energy efficient home improvements through 2010, it also increased the maximum tax credit to $1500. The purpose of the tax credit is to minimize the initial sting of the cost to homeowners for these improvements by allowing tax credits for 30 percent of the cost of the upgrade, up to the maximum limit. Public Information Coordinator, Elwood Hamilton of the South Carolina Energy Office, explains the bill and what is considered to be energy efficient home improvements. “They are part of the American Recovery and Reinvestment Act which is also known as the Stimulus Bill,” he said. “What this bill did is it enhanced and extended some the existing tax credits for energy efficient home improvements.

“These home improvements are things like windows, doors, insulation, water heaters, HVAC systems, and even roofing.”

Hamilton says that in order to claim the tax credits, the homeowner would file those claims along side their taxes. “That’s right. When they file their 2009 taxes, if they do decide to go ahead and put some these things in 2009 when they’re filing their 2009 taxes, there would be a form. It’s IRS form 5695 and they would just file that form as well.

“That form will be available, the IRS tells me, in late 2009 or early 2010.”

Once again, the purpose of the tax credit is to minimize the initial cost to homeowners while allowing them to save money in the long run by lowering the future cost of energy. According to Hamilton, “Initially, they are (spending) but they do save a lot of money over the maintenance and operating costs over the life of these products.  They do save money. The initial costs is sometimes more, or actually I should say usually more, than your standard products and services. So what this does (the tax credit), is it kind of lessens the sting for homeowners who want to become more energy efficient but might not have the upfront funds to be able to swallow this.”

Hamilton says to get a better idea of what products and services are available and how to file for the tax credits, visit this site. Energy Star is likely what you are looking for. “Most of the eligible products are going to be Energy Star,” he said. “Energy Star is a joint program administered by the EPA (Environmental Protection Agency) and the Department of Energy so whenever you see that blue-branded logo, that is kind of the gospel, as it were.

“It’s a high level of energy efficiency in the eligible products. Energystar.gov is where a listing detailing what all these tax credits are and it also list eligibility requirements for all the products.”