Fed Tax Credit, Rebates For Select Home Improvement Projects

Fed Tax Credit, Rebates For Select Home Improvement Projects

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If you’re planning a home improvement project for this year or next, you may want to take a look at the legislation that President Barack H. Obama signed into law on February 17, 2009. That bill, known as the American Recovery and Reinvestment Tax Act of 2009, is a $787 billion stimulus/pork initiative that includes some important benefits for homeowners.

Energy StarIn particular, if you are looking to replace windows, doors and skylights on your home, you could receive a significant rebate on your federal taxes.

The new bill actually modifies the tax credits for windows, doors and skylights established in the Energy Policy Act of 2005, which was signed into law by President George W. Bush on August 8, 2005, containing the following provisions according to the Energy Star program which is part of the U.S. Environmental Protection Agency:

  • To qualify for the tax credit, windows, doors, and skylights placed in service after February 17, 2009 must have a U-factor and Solar Heat Gain Coefficient (SHGC) less than or equal to 0.30. You can find the U-factor and SHGC on the National Fenestration Rating Council (NFRC) label. See an example of the NFRC label. NFRC is the only federally recognized organization for determining the energy performance of windows, doors and skylights. Please see the NFRC website for information concerning product performance.
  • Qualifying products purchased between February 17, 2009 and December 31, 2010 are eligible for a tax credit equal to 30 percent of the product cost. The maximum amount of homeowner credit for all improvements combined (including roofing, insulation, HVAC, and water heaters) is $1,500 during 2009 and 2010.
  • For products purchased between January 1, 2009 and February 16, 2009, the terms of the tax credit are less clear. The Internal Revenue Service will likely clarify these terms in guidance documents, which are expected to be released later this year.

Definitely, the new law adds hundreds of billions of dollars to the US debt, something that the American taxpayer must consider when pursuing this type of tax rebate. Still, with the money on the table, many homeowners will likely consider what amounts to be a huge tax incentive, giving them as much as $1500 back on their qualified home improvement project.

Source: Energy Star

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Categories: Home Improvement