It's hard to believe that tax time is once again approaching. That looming tax deadline may have some of you scrambling to gather information on your energy-related home improvements so you can take advantage of the 30% federal tax credit (worth up to $1500) that expired at the end of 2010.
This time last year, my husband I had big plans to take advantage of that tax credit. Our natural gas furnace is a workhorse; it's been doing its job without much fuss since our house was built over 20 years ago, and doesn't necessarily need to be replaced. But it wasn't at the top of its class in energy efficiency when it was installed, and there are plenty of newer options that could mean significant savings in fuel costs. With the additional tax credit savings, a new furnace seemed to make good sense.
Unfortunately, time got away from us, and we found ourselves ringing in 2011 with our same old furnace chugging along in the garage. Which was why we were pretty excited to hear that the Tax Relief Act of 2010 extended the federal energy efficiency tax credits for homeowners through the end of 2011. There is bad news, however: the 2011 tax credits are quite different than the credits available in 2010.
For starters, the total amount of the credit is reduced. In general, the largest tax credit available is $500, although credits for specific improvements can be lower. My new gas furnace, for example, has a maximum tax credit of $150. Too, your ability to take advantage of the credit in 2011 might be reduced if you already used it in past years. You can find more detailed information on eligibility requirements and credit amounts in the Database of State Incentives for Renewables and Efficiency.
I can be a pretty big procrastinator, but hopefully this extension will be just the encouragement I need to get that new furnace installed before the end of the year.