The Internal Revenue Service (IRS) has put a number of incentives in place for taxpayers who think “green” and make energy-efficient home improvements in 2009 or 2010.
The American Recovery and Reinvestment Act of 2009 (ARRA) increases the energy tax credit for homeowners who make energy-efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum tax credit limit to $1,500 for improvements placed in service in 2009 and 2010. Some improvements that qualify for the credit are:
- Energy-efficient exterior windows, doors and skylights
- Energy-efficient heating and air conditioning systems
- Water heaters (natural gas, propane or oil)
- Roofs (metal and asphalt)
- Biomass stoves
The credit may also apply to installing alternative energy equipment such as solar water heaters, geothermal heat pumps and small wind turbines. But be sure that you check to see if your planned improvements meet the government’s definition of “energy-efficient!” The standards are higher than they were when a similar credit was offered in 2007, and you don’t want to do the work only to find that your improvements don’t qualify for the credit.
Looking to drive around the neighborhood in an electric car? There’s a tax credit for that, too. The Emergency Economic Stabilization Act of 2008 (EESA) created a tax credit (plug-in electric drive motor vehicle credit) for vehicles that have at least four wheels and draw propulsion using a rechargeable traction battery with at least four kilowatt hours of capacity. For 2009, the minimum credit is $2,500 and the credit tops out at $7,500 to $15,000, depending on the weight of the vehicle and the capacity of the battery. Also, ARRA created a tax credit (plug-in electric vehicle credit) for low-speed or two- or three-wheel electric vehicles, such as motor scooters, purchased after Feb. 17, 2009, and before Jan. 1, 2012. The amount of that credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500. To qualify, a vehicle must be either a low-speed vehicle that is propelled to a significant extent by a rechargeable battery with a capacity of at least 4 kilowatt hours, or be a two- or three-wheeled vehicle that is propelled to a significant extent by a rechargeable battery with a capacity of at least 2.5 kilowatt hours.
Read more about how you can save on your energy bills and get paid for your “green-ness” at the IRS Web site.