On February 17, 2009 President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits.  Read the below information for some highlights of the bill.  You can also click on the links provided to read the actual bill.

The highlights of the bill:

The tax credits that were previously effective for 2009, have been extended for 2010.

• The tax credit has been raised from 10% to 30%.
• The tax credits that were for a specific dollar amount have been converted to 30% of the cost.
• The maximum credit has been raised from $500 to $1500 for the 2 years (2009-2010).
• The $200 cap on windows has been removed.

For additional information concerning this bill, click here to read the PDF version of the original bill.  Once at the PDF version, scroll down to page 210.  Or, for a complete summary of tax credits, click here.

Tax Credits for Home Improvements:

• Must be placed in service from January 1, 2009 through December 31, 2010.
• Must be for taxpayer's principal residence.
• Maximum amount is $1500 in 2009 & 2010 for most home improvements.
• By installing energy efficient windows and doors, with a U-value of 0.30 or better, and an SHGC of 0.30; homeowners are approved for up to a 30% tax credit of improvement costs, not to exceed $1500.  For example: A $5000 window replacement would create a $1500 tax credit.
• For record keeping, save your receipts and the manufacture certification statements, or for windows, you can save the energy star label from your windows.
• Improvements made in 2009, will be claimed on your 2009 taxes (filed by April 15, 2010)-use IRS form 5695 (2009 version)-available late 2009 or early 2010.
• If you are building a new home, you can qualify for the tax credit for photovoltaics, solar water heaters, small wind systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.