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Last chance for tax rebates on energy efficient home improvements

Posted by Woodrow Aames ~ November 14, 2011

Homeowners have until December 31 to buy materials and install energy efficient home improvements under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Provisions of the bill, an extension of previous tax credits, mandate that you buy only ENERGY STAR-compliant biomass stoves, heat and air conditioning units, insulation, roofing, water heaters, windows, doors and skylights.

Consumers must check with The Department of Energy to view precise details of products included in the tax credit program. To file for the credit, you need to include IRS Form 5695 in your April 2011 returns. Each product that complies is sold with a Manufacturer Certification Statement, which you'll need to photocopy for your records and send along with your tax filing. You can install as many qualifying items as you wish, but there is a $500 lifetime limit on credits that expire on December 31, 2010.

Home improvements to consider for credits

Energy Savers lists the following projects and potential tax credits for items installed in your primary residence:

Biomass stoves, includes contractor installation costs: $300

Central air conditioning, includes installation, $300

Electric Heat Pumps, includes installation, $300

Furnaces and Boilers, includes installation, $100

Advanced Main Air Circulating Fan, includes installation, $50

Insulation, materials only, 10 percent of the cost, up to $500

Roofing, materials only, 10 percent of the cost, up to $500

Water Heaters (non-solar), includes installation costs, $300

Windows, Doors, and Skylights, materials only, 10 percent of the cost, up to $500, but windows are capped at $200.

According to ENERGY STAR, performance criteria for windows, doors and skylights are determined by climate zones across the country and performance ratings established by The National Fenestration Rating Council (NFRC). Each product will contain the NFRC label that lists the performance based on U-factor, Solar Heat Gain Coefficient, Visible Transmittance, Air Leakage, and Condensation Resistance. In addition, the manufacturer or retailer will give each buyer the Manufacturer Certification Statement required for a tax credit.

Looking ahead to the future

There are green, energy efficient products and home improvements that will remain eligible for tax credits through 2016 at 30 percent of the cost with no upper limit. These include geothermal heat pumps, solar energy systems, fuel cells, and wind energy systems. FYI: You can also receive credit up to $7,500 if you purchase a plug-in electric vehicle.

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