Insulate Tax Credits End December 31st
The American Recovery and Reinvestment Act of 2009 reinstated tax credits for energy-efficiency improvements to homes, but the deadline for taking advantage of the credits is rapidly approaching.
The federal tax credit for energy-efficient home insulation expires Dec. 31 so the clock is ticking. All projects must be completed by this date to qualify. Whether you are building a new home or planning to retrofit your current one, adding energy-saving, environmentally friendly cellulose insulation will save money on home energy bills for years to come. And, the tax credit up to $1,500 means savings in the form of a bonus next April 15th.
A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government. Many states also offer additional tax incentives.
The credit is good only if your insulation is installed by Dec. 31. If you purchase your product but the installers can’t get it into your house before the deadline, you won’t qualify for the credit. There is still plenty of time to complete an insulation project but consumers should act soon in order to ensure they meet the Federal rules and any rules specific to incentives offered in their home state.
A few notes about the tax credit:
1. The credit for windows, doors, insulation, air conditioning and roofing is good only for improvements to your principal residence.
2. You may also qualify for other credits, discounts and rebates in addition to the federal tax credits. Check for opportunities with your local state, county, city and utility to see if you can save even more on the specific energy-saver items you are buying.
3. You can claim the credit on 30 percent of the cost up to $1,500 combined until the end of 2010 on the following projects:
- Windows, doors and skylights
- Metal or asphalt roofs (other kinds don’t qualify)
- Electric heat-pump water heaters; gas, oil or propane water heaters
- Air conditioning and heating systems
- Biomass stoves
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