Dennis Norman
By: Dennis Norman
In the current real estate market some people are deciding to stay put in their existing homes instead of trying to sell. Often this leads to the decision to make improvements to your home. The good news is if you are doing improvements that add to the energy efficiency of your home, you may be eligible for tax credits.
Included in the economic stimulus package that was passed by Congress earlier this year were tax credits for energy efficient home improvements.
Below are some highlights of the tax credit program:
- Everyone is eligible for the tax credits, regardless of income. No limits.
- The improvements must be completed between January 1, 2009 and December 31, 2010
- Must be for you principal residence (except in the case of geothermal heat pumps, solar water heaters, solar panels and small wind energy systems – for these items second homes qualify as well)
- The maximum credit is $1,500 for all products place in service during 2009 and 2010 for home improvements (except for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016)
- Improvements made in 2009 will be claimed on your 2009 taxes.
- New homes qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.)
Simple, right? Hardly…It sounds a little complicated to me but if you visit the Energy Star website you will see it has extensive information available on the credit. In addition the website has a form allowing you to submit questions.
Related posts:
- Tax Credits Help Homeowners Winterize Their Homes; IRS says check credit certification first
- Green Building; What it is and what to look for
- Which home improvements and remodeling projects pay off?
- Closing Deadline For Homebuyer Tax Credits May Be Extended
- Home Prices and Interest Rates May Offset Loss of Tax Credits
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It’s a great time to invest in geothermal heating and cooling technology. The American Recovery and Reinvestment Act of 2009 recently lifted the caps on tax credits to qualified geothermal heat pumps, which was previously set at $2000. Homeowners who install a geothermal ground loop or ground water geothermal heat pump qualify for this one time of up to 30% of the total investment, as long as the pump meets or exceeds EnergyStar requirements and installed after December 31, 2009. Business owners will receive a credit of 10% of the total investment. Units installed in 2008 are subject to a $2,000 cap, but those installed between 2009-2016 have no cap.
This substantial tax credit is just one of the many benefits of using geothermal technology to heat and cool your home. Geothermal systems use 25-50% less electricity than conventional systems. According to the EPA, geothermal pumps reduce energy consumption up to 44% compared to air-source heat pumps, and up to 72% compared to standard air-conditioning. In humid areas, like Florida, geothermal heat pumps improve humidity control by maintaining 50% relative indoor humidity.
But it’s not just the tax credit or energy savings that should peek your interest, geothermal heat pumps are also extremely durable and reliable. The underground piping carries warranties of 25-50 years, and the heat pumps are known to last twenty years of longer.
So, if you’re looking for a reliable system that will also give you tremendous savings on your energy bill over the long-run, a geothermal heat pump may just be what you’re looking for!