The Nonbusiness Energy Property Credit for energy-efficient improvements to your principal residence was not available in 2008. However, it’s back again for two more years in 2009 and 2010.
The credit equals 30 percent of the amount paid for:
• Qualified energy efficiency improvements (i.e., insulation, windows & doors, metal/asphalt roofs, etc.); and
• Residential energy property expenditures (i.e., central air conditioners, natural gas furnaces, tankless water heaters, biomass fuel stoves, etc.).
This credit is available for existing homes only and is limited to $1,500.
If you aren’t sure which property qualifies for the credit, go to www.energystar.gov and look up “Tax Credits for Energy Efficiency.” You shouldn’t assume that all ENERGY STAR products qualify for the credit. Make sure you receive proper certification from the manufacturer that the property qualifies for the credit.
There is a cap of $1,500 on the total nonbusiness energy property credits allowed. This cap only applies to property placed in service in 2009 and 2010. Thus, you can claim up to $1,500 even if you already claimed a $500 nonbusiness energy property credit in 2006 or 2007.
You can claim this credit regardless of your modified adjusted gross income. Unlike the First-Time Homebuyer Credit, it is nonrefundable. To the extent it exceeds your tax liability, you lose it. Therefore, it may be wise to hold off making any improvements until 2010 if you don’t expect to owe a lot of taxes this year. Another alternative is to make some improvements each year.
Posted on 2009-06-27 00:09:33