Energy Saving products & Energy Tax Credits
2009-2010 Energy Tax Credit Quick Facts
Aaron’s Construction can provide and install energy-saving products to help you reduce your utility bills year-round. And now you can get help paying for them, too!
On February 17th, President Obama signed the $789 billion economic stimulus bill that includes tax credit incentives for homeowners who make energy-efficient home improvements. The bill extends eligibility for tax credits through 2010 on energy-efficient improvements—including qualifying windows and doors.
The bill includes the ability for homeowners to receive a tax credit of 30 percent of the cost of qualifying energy-efficient products up to a maximum of $1,500 per household for all improvements made in 2009 and 2010.
- The requirements to qualify for the new energy tax credit include:
- Windows purchased must be equal to or below a U-Factor of 0.30 and a Solar Heat Gain Coefficient (SHGC) of 0.30.
- The purchase of the qualified windows must be made during the taxable year for which the credit is being claimed.
- The credit is only allowed on the price of the qualified windows themselves, not on installation costs, onsite preparation, assembly or sales tax.
- The tax credit is allowable only for qualified window units placed in service in 2009 and 2010.
- Homeowners must save their receipts for their windows purchased along with all window labels and stickers for verification and tax recordkeeping.
- The windows must be installed in the taxpayer's principal residence.
- This tax credit is capped at a total of $1,500 for the years of 2009 and 2010.
- Unlike a tax deduction, which only reduces the amount of your taxable income, a tax credit reduces the amount of tax you owe.
2009-2010 Energy Tax Credit – Frequently Asked Questions
What are the key tax credit benefits for home improvement projects?
- Several important changes have improved the tax credit program for home improvements:
- The eligible period has been extended! Qualifying products must be placed in service from January 1, 2009 through December 31, 2010.
- The tax credit has been raised from 10% to 30% for qualifying products.
- The maximum credit has been increased from $500 to $1500 for the two eligible years (2009-2010).
- What other qualifications exist?
- The products must be purchased for and installed in the taxpayer's principal residence.
- For record-keeping, save your receipts, Manufacturer Certificates, and ENERGY STAR labels from your windows.
- Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010).
- If you are building a new home, the tax credit is not applicable for windows, doors, insulation or roofs.
ENERGY STAR® is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy-efficient products and practices. Check out energystar.gov/taxcredit for more information on the available federal tax credit when you purchase energy-efficient windows and doors.
Aaron’s Consulting, Inc. is not a legal or tax advisor. The above summary is not comprehensive and is not intended to substitute for the advice of a lawyer or professional tax advisor. Aaron’s Consulting expressly disclaims any responsibility for determining whether a window purchase will qualify for the energy tax credit or whether a purchaser will receive the energy tax credit. Aaron’s Consulting recommends that consumers consult their tax advisors and review IRS guidance prior to purchasing any window product. For further details on the energy tax credit, check the IRS website.