Homeowners Benefit From The Federal Tax Credits For Energy Efficiency

Homeowners can purchase and install certain energy efficient products can receive up to 30% of the cost of the product off their taxes. Depending on what type of product the homeowner purchases and when determines if they qualify for and how much of a tax credit they qualify for.

Homeowners of existing homes can take advantage of one part of the energy efficiency tax credit during 2009 and 2010. By replacing older, less efficient items such as doors, heating/air systems and roofs with models that qualify; homeowners can receive up to 30% of costs for the purchases with a cap of $1,500 for the two years. To find out more about this part of the tax credit and the items requirements click here.

The second part of the tax credit goes through 2016. Homeowners of new or existing homes may take advantage of this part of the tax credit. The items covered under this part of the tax credit are usually more expensive than the first part that only goes through 2010. They include solar energy systems, small wind energy systems and fuel cells. Homeowners that install these items that qualify will receive 30% of the costs with no cap as with the first part of the tax credit. Click here to learn more about this part of the energy efficient tax credit.

Homeowners should research the products available and which ones are covered under the Federal tax credits prior to purchasing. They should also consult their tax professional to make sure they are following the tax law for their purchase. The manufacturer certification statement and the receipts must be kept for documentation proof of purchase.

One thing to know is a tax credit is better than having a tax deduction. The tax credit goes straight off the amount of taxes that is owed. With a tax credit, the taxpayer gets dollar-for-dollar off of their taxes. A tax deduction only reduces the taxpayer’s income and in turn the taxpayer only receives a percentage of the tax benefit.

The Federal tax credit for energy efficiency benefits homeowners beyond just on their taxes. Due to these products energy efficiency, the homeowners will also see a reduction in their power bills for years to come. The savings on the power bills and now the taxes should more than pay for the additional costs of the more efficient products.

Written by Denise Clay
Hickory, NC
Exclusive to HULIQ