If you did some renovations to your home last year, you may be wondering if these renovations qualify for the 2009 Energy Tax Credit. First of all, all individuals qualify regardless of income. The way the credit is calculated is by taking 30% of the cost of the home improvement. The maximum amount of the credit is $1,500. This credit only applies if the purchases were for your primary residence and meet these specifications:
Windows & Doors
Exterior Windows and Skylights – Before 06/01/09: Must meet Energy Star criteria; after 06/01/09: U factor < 0.30; SHGC < 0.30.
Storm Windows – In combination with the exterior windows over which it is installed; has a U-Factor and SHGC of 0.30 or below; meets the IECC.
Exterior Doors - Before 06/01/09: Must meet Energy Star criteria; after 06/01/09: U factor < 0.30; SHGC < 0.30.
Storm Doors - In combination with a wood door over which it is installed; has a U-Factor and SHGC of 0.30 or below; meets the IECC.
Heating, Ventilation and Air Conditioning (HVAC)
Central A/C – Split system: EER > 13; SEER > 16 package systems: EER > 12; SEER> 14
Air Source Heat Pumps – Split systems: HSPF > 8.5; EER > 12.5; SEER > 15 package systems: HSPF > 8; EER > 12; SEER > 14
Natural Gas or Propane Furnace – AFUE > 95
Oil Furnace - AFUE > 90
Gas, Propane, or Oil Hot Water Boiler - AFUE > 90
Advance Main Air-Circulation Fan – No more than 2% of furnace total energy use.
Gas, Oil, Propane Water Heater – Energy factor > 0.82 or a thermal efficiency of at least 90%
Electric Heat Pump Water Heater – Same criteria as ENERGY STAR: Energy factor > 2.0
Insulation – Meet 2009 IECC & Amendments. For insulation to qualify, its primary purpose must be to insulate (example – insulated siding does not qualify).
Metal Roofs, Asphalt Roofs – All ENERGY STAR qualified metal and reflective asphalt shingles.
Biomass Stove – Stove which burns biomass fuel to heat a home or heat water. Thermal efficiency rating of at least 75% as measured using a lower heating value.
If you are not sure if your upgrades meet these criteria, go to www.energystar.gov and check your model number (s).
Make sure to give a copy of your receipt and the energy certificate that the vendor needs to supply to your tax preparer so they can double check your purchase and get the correct amount to calculate your credit.
Also, please remember that if an energy credit is taken in your Federal Income Tax Return, the home basis or must be reduced by the amount of the credit taken.
You purchased your home for $110,000 in 2001. In 2003, you made renovations in the amount of $5,000. In 2009, you took a $738 energy credit on your tax return. In 2010, you decide to sell your home at $129,500. When you calculate the gain or loss on the sale, these calculations must be made.:
Cost of home:
Purchase Price $110,000
Less Energy credit -$738
Seller’s cost $114,262
Gain or Loss:
Sales Price $129,500
Less Seller’s cost -$114,262