Okay, you plan to make major renovations around your home. Did you know you could get "non-refundable" tax credits if you purchase items that qualify under the Energy Efficiency Tax Credits? (In Canada refer to the ecoENERGY Retrofit – Homes.) These are items that are considered to be energy-efficient products or renewable energy systems for your home. These credits apply on installations that occurred in 2009 or will occur in 2010 on existing primary residences.
The credit could be 30% of the cost up to $1,500. These purchase items are identified by the Energy Star symbol. To claim the renewable and efficiency credits use IRS Form 5695, plus save your receipts and the Manufacturer Certification Statement for your records. The following are items that you can claim.
Exterior Doors, Storm Windows and Skylights
Qualified windows, doors, and skylights help to reduce energy bills by up to 15% and at the same time help protect the environment. Use the Energy Star label from windows and skylights bought before June 1st, 2009 to document and claim your credit. Storm windows and doors must meet the International Energy Conservation Code (IECC). Get a manufacturer's certification statement for your records.
This credit applies to metal or asphalt roofing that has pigmented coatings or cooling granules which are designed to reduce heat gain. Get a manufacturer's certification statement for your records. Credit does not include installation and labor cost.
The insulation material must reduce heat loss or gain in your home. The insulation must meet 2009 International Energy Conservation Code (IECC) & Amendments. This credit does not include installation and labor costs.
Central Air Conditioning and Heating
Not all Energy Star air conditioners qualify for the tax credit, therefore before you purchase, verify tax credit eligibility by asking your HVAC contractor to provide the manufacturer's certification. Note, you may have to replace your furnace to get an air conditioner that qualifies for credit. This credit does include installation costs.
Energy Star gas, oil, and propane water heaters, electric heat pump water heaters and gas tankless water heaters qualify for the tax credit, because they provide hot water as needed. No energy is lost, and money is saved. Solar water heaters can also qualify, with a credit of 30% of the cost (including installation/labor costs), with no upper limit. The remaining water heaters have a credit of 30% of the cost (including installation/labor costs), up to $1,500. Both electric storage tank and tankless water heaters do not earn the Energy Star status because they have limited energy savings.
Biomass Fuel Stoves
Biomass stoves with a thermal efficiency rating of 75% or more qualify for tax credit; this includes installation. Biomass stoves heat homes or water by burning agricultural crops, trees, wood, wood waste and residues (including wood pellets), plants (including aquatic plants), grasses and fibers.
Make sure you retain all the necessary information, and good luck with your conversion and home renovation.