Tax credits for energy-efficient home improvements

If you’re interested in improving your home to make it more energy-efficient, you have a rich uncle willing to help pay for it: Uncle Sam.

The American Recovery and Reinvestment Act (also referred to as the “stimulus package”), signed into law on Feb. 17 of this year, includes Federal tax credits for energy-efficient home improvements such as new windows, doors, insulation, roofing, and heating and air conditioning systems. The credit is for 30 percent of the cost of materials, up to $1,500.

The products installed must meet certain standards of energy efficiency in order to qualify for the credit. There has been some confusion over what products qualify, especially in the case of windows. The Federal government standard for windows has actually changed three times since February.

The “final answer” on windows is, effective June 1, 2009, replacement windows must meet a stringent standard for insulation (U value of .30 or less) and resistance to solar heat gain (coefficient of .30 or less).

A tax credit which was in effect in past years had a lower standard of qualification – that is, that the windows be Energy Star rated. Energy Star is a sort of “seal of approval” by the federal government that says products are “energy efficient.” You may have seen it on household products like appliances and lighting. There is also an Energy Star standard for windows, which many windows meet. But that does not guarantee that they’re good enough to qualify for the tax credit. The Energy Star website puts it this way:
“… not all ENERGY STAR qualified homes and products qualify for a tax credit. These tax credits are available for a number of products at the highest efficiency levels, which typically cost much more than standard products.”

If you find that confusing, you’re not the only one. And the rules for insulation, roofing, and heating/air conditioning systems can be even more confusing. The bottom line is, the tax credit can provide substantial help in paying for home improvements, but “doing it right” requires some guidance from informed professionals.

At Ken Spears Construction, we’re working hard to learn all the details and stay up-to-date on rules that are sometimes changing day-to-day. We aren’t tax advisors, but we can help make sure you get the right products and the right documentation to qualify, as well as being the right product for your home and lifestyle. We can also deliver top-quality installation, so you reap the full energy savings and improved appearance to your home, as well as the tax advantage!