As April 15th draws nearer, no doubt taxes are on your mind. You may be wondering whether the recently passed American Recovery and Reinvestment Act (aka the "Recovery Act") will affect your taxes for 2008. While the IRS says that the tax provisions in the Recovery Act won't affect most people's 2008 tax returns, you may already be planning an energy-efficient purchase in 2009 that will be eligible for a tax credit.
Back in October, I wrote about energy tax incentives available in 2009. The Recovery Act amended the energy tax credits, and the good news is that those tax credits are still available. The even better news?
- The credits for items such as windows and doors, insulation, roofs, HVAC, water heaters (non-solar), and biomass stoves are now available for improvements made in 2009 AND 2010 (previously they were only available for 2009).
- The credits have been raised from 10% to 30% of the cost. Those items that had a specific dollar amount have been changed to a 30% credit.
- The maximum credit over two years has been increased to $1,500 (up from $500).
- Improvements such as geothermal heat pumps, solar water heaters, solar electric systems, small wind systems, and fuel cells are not subject to the $1,500 maximum and are still available through 2016 for both existing and new homes.
- The $200 cap on tax credits for windows has been removed, but note that the requirements are more stringent and not all ENERGY STAR windows qualify for a credit.
For more details on the energy tax credits available, see the summary of federal tax credits for energy efficiency on the ENERGY STAR® Web site. Also be sure to check out the tax credit FAQs for answers to more specific questions, including which credits are available for 2008.
Don't forget that tax credits aren't the only way to offset your energy costs. You can reduce your energy costs by finding help from your state, city, or utility; or by purchasing energy-efficient products. For more ways to find assistance with energy costs, check out the blog entries Six Places to Find Help with Your Energy Costs.