Thinking about making some
energy saving improvements to your home this summer? Taking some energy saving steps now may lead to
bigger tax savings next year. The Nonbusiness Energy Property Credit, a tax credit for making energy
efficient improvements to homes was increased as part of the American Recovery and Reinvestment Act
of 2009.
Here are seven things we want you to know about the Nonbusiness Energy Property
Credit:
- The new law increases the credit rate to 30 percent of the cost of all qualifying
improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined.
- The
credit applies to improvements such as adding insulation, energy-efficient exterior windows and
energy-efficient heating and air conditioning systems.
- To qualify as "energy
efficient" for purposes of this tax credit, products generally must meet higher standards than
the standards for the credit that was available in 2007.
- Manufacturers must certify that
their products meet new standards and they must provide a written statement to the taxpayer such as
with the packaging of the product or in a printable format on the manufacturers' Website.
- Qualifying
improvements must be placed into service after December 31, 2008, and before January 1, 2011.
- The
improvements must be made to the taxpayer's principal residence located in the United States.
- To
claim the credit, attach Form 5695,
Residential Energy Credits to either the 2009 or 2010 tax return. Taxpayers must claim the credit on
the tax return for the year that the improvements are made.
Homeowners who have been
considering some energy efficient home improvements may find these tax credits will get them bigger
tax savings next year.
For more information on this potentially valuable credit, please consult one of our members.
