David A. Markham

Tax Credits for Home Improvements

Tax credits are still available for home improvements that increase energy efficiency, generate power or harness geothermal heating and cooling. If planning property improvements or just looking to go a bit greener, the following Information may help.

Basic Home Improvements

Home improvements include qualified Insulation, Windows, Exterior Doors, Skylights, Roofing, HVAC improvements, Biomass Stoves, etc.

Unless Congress extends the deadline, all improvements must be installed and in operation between January 1, 2009 and  December 31, 2010 to achieve the credits with exception to solar power generation, geothermal heat pumps, solar water heating and generation by wind which has a deadline of December 31, 2016.

Improvements must be to the principle residence of the taxpayer and can be claimed on 2009 return for work done in 2009 and 2010 return for work done in 2010. New homes only qualify for generation, geothermal and fuel cell systems shown below.

Credits are generally worth 30% of cost with a maximum aggregate credit of $1,500 for all qualified improvements for the 2 year span of January 1, 2009 to December 31, 2010.

Manufacture Certification Statements are required to be kept on file to qualify in case of audit.

Power Generation/Geothermal/Fuel Cell

These improvements include Geothermal Heat Pumps, Solar Water heating systems, Photovoltaic systems, Residential small wind turbines and Fuel Cell systems.

Unless Congress extends the deadline, all improvements must be installed and in operation between January 1, 2009 and December 31, 2016 to achieve the credits.

Improvements must be to the principle residence and/or second home of the taxpayer and can be claimed on the tax return of the year put into service. All maintenance and recurring costs qualify through tax year 2016. New homes qualify for the tax credit for these systems.

There is no maximum limit to the amount that can be claimed for tax purposes.

Manufacture Certification Statements are required to be kept on file to qualify in case of audit.

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