Home Remodeling Tax Credits Equal Big Savings
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While the original tax credit determined for energy-efficient home remodeling jobs was only 10%, with a total cap-off amount of $500, it has since tripled! Home improvement tax credits are now at 30%, with a total cap-off amount of $1,500 for minor remodeling projects—meaning you can spend up to $5000 on home improvements to earn a $1,500 tax credit. Read on to find out what tax credit amount you are eligible for, and which home improvements the tax credit applies to.
A Greener Home for a Greener Wallet
All manner of green home remodeling projects are becoming popular and heavily advocated due to their long-term promise of cost-effectiveness and environmental safe-guarding. But in terms of the current tax credits being offered to American homeowners for implementing green changes, there are some specific items and remodeling projects that are being rewarded over others.
These are the minor green remodeling projects that qualify for the 30% tax credit, and can mean a $1,500 credit for you:
- Windows
- Doors
- Roofs (Metal and Asphalt)
- HVAC Systems*
- Non-solar Water Heaters*
- Biomass Stoves*
- Insulation
*Installation costs are included in the total item amount for these green remodeling items. On the other hand, installation costs for windows, doors, roofing or insulation is not included.
All of the items on the above list must be installed by December 31, 2010, and in a permanent residence, as opposed to rental property, to receive the available 30% tax credit on their claim the following year. The imposed limit of $1,500 for most items means that homeowners can spend up to $5000 making these specified home improvement changes. However, for the even bigger and greener home remodeling projects (see list below), the government decided to extend the tax credit deadline all the way to 2016!
These items will also receive a 30% tax credit, but can be installed through the year 2016, and have no limitations on total item costs:
- Solar Panels
- Solar Water Heaters
- Geothermal Pumps
- Small Wind Energy Systems
- Fuel Cells
Because these home improvement items have no imposed cost limits, you can literally spend tens of thousands of dollars on the "greening" of your home, provided it's on the approved items, and it will all qualify towards the 30% tax credit—not to mention the effect on your home's overall energy efficiency will go through the roof!
Unfortunately, you won't get any tax credits for updating other major appliances like clothes washers and dryers, dishwashers, room air conditioners, ceiling fans and insulated siding—although implementing these green appliances in your home will still wind up saving you money! If you are getting new green appliances, it's recommended to check and see if they're Energy Star approved appliances, or that they have a Manufacturer Certification Statement to verify the energy efficiency quality of the product.
No matter what home improvement measures you're considering, in order to get your own remodeling tax credit break this year or next, it's recommended to hire a trusted home contractor to help you with your door and window installation, roofing installation, etc. It's even more preferable to have the assistance of a contractor who's experienced in green building, and is familiar with the related materials and item requirements.
For more in-depth information about the requirements for home improvement tax credits through green remodeling items and appliances, check Energy Star's site, www.energystar.gov/.
