2010 Federal Tax Credit for Energy Efficiency

This is a guest post by James Kenton

James Kenton is owner of Advanced Metal Roofing, a residential metal roofing company featuring ENERGY STAR metal roofing colors that qualify for the 2010 Federal Tax Credit.

The federal government is offering a tax credit for energy efficiency that expires December 31, 2010 through its ENERGY STAR program. This means that now is the time to make home improvements or jump start that remodeling job you’ve been waiting on in order to benefit from the tax credit. It’s important to first confirm with your home improvement contractor that the appliance or parts they are installing comply with the qualifications of the tax credit. You can also check this yourself in order to hold your home contractor accountable.

The ENERGY STAR website provides information on what type of home improvement or home remodeling projects qualify for the energy efficiency tax credit. They point out that products that qualify for the ENERGY STAR seal do not necessarily qualify for the tax credit, but they do ensure that you are helping to make your home more energy efficient while also saving money on home heating, cooling, electric, and/or gas bills. Categories of home improvement projects that do qualify for the 2010 federal tax credit include:

  1. Windows, Doors, and Skylights
  2. Storm Windows and Doors
  3. Metal Roofs with Appropriate Pigmented Coatings
  4. Asphalt Roofs with Appropriate Cooling Granules
  5. Insulation such as Bulk Insulation and Air Seal Products such as Weather Stripping, Spray Foam, Caulk, and House Wrap
  6. Gas, Oil, and Propane Water Heaters
  7. Electric Heat Pump Water Heaters
  8. Advanced Main Air Circulating Fans
  9. Air Source Heat Pumps
  10. Central Air Conditioning
  11. Gas, Propane, or Oil Hot Water Boilers
  12. Natural Gas or Propane Furnaces
  13. Oil Furnaces
  14. Biomass Stoves

The home improvement items listed here each have specific requirements that make them eligible for the tax credit. You can check with your contractor to make sure that the appliance, item, or system you choose will meet those requirements. You can double check for yourself on the ENERGY STAR 2010 Federal Tax Credit website.

Each of these items are eligible for a 30% tax credit of the cost of the item up to $1,500. You may have heard of this tax credit referred to as the 30% Tax Credit or $1,500 Tax Credit. Those are both slightly misleading because you may receive a full 30% if the cost is under $1,500 or you may receive $1,500 if the item cost exceeds that amount. In most cases, the tax credit does NOT include installation costs.

In order to take advantage of this energy efficiency tax credit, you must purchase the qualifying home improvement item before December 31, 2010. Then you must file an IRS Form 5695 with your 2010 federal taxes (this link is for the 2009 version of the form – please check back with the IRS for the 2010 version).

The ENERGY STAR website has more information and answers to frequently asked questions: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index. This post is not a definitive resource. Please be sure to read the ENERGY STAR website thoroughly to be sure you are in compliance with their guidelines and that you follow their instructions in order to receive the energy efficiency credit.

Happy Home Remodeling!

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