Winterizing a home typically includes simple projects like adding insulation and window films, upgrading replacement windows, repairing roofs and replacing inefficient heating/cooling systems. All of these measures are eligible for increased tax credits, thanks to the American Recovery and Reinvestment Tax Act of 2009.
In an effort to promote energy efficiency, the provision increases the financial cap for these incentives, which cover home envelope improvements as well as heating, cooling and water heating equipment. The incentive is 30 percent of the project cost, with a $1,500 cap on the credit per home (up from $500). The Congressional act also extends eligibility for projects installed in 2009 and 2010.
The tax credit for envelope improvements is based on the cost of the materials installed (insulation, windows, sealants, etc.); not the cost of labor. The credit for home heating and cooling and water heating equipment is based on both the cost of the materials and installation labor costs.
“Envelope” home improvement projects that qualify for the tax credits include:
- Insulation & Sealing: Adding insulation to walls, ceilings or other parts of the building envelope, plus sealing ducts and cracks in the shell to reduce infiltration and heat loss, as specified in the 2009 IECC model energy code.
- Replacement Windows, Skylights & External Doors: Eligible replacement windows and doors must be equal to or below a 0.30 U Factor and Solar Heat Gain Coefficient. Some storm windows and doors are also eligible.
- Window Films: Window films are eligible for the tax credit if the manufacturer certifies that the specific window film satisfies the requirements of a qualifying insulation system.
- Roofs: Pigmented metal roofs and asphalt roofs with cooling granules that meet ENERGY STAR standards both qualify.
Eligible home heating and cooling equipment includes:
- Furnaces & Boilers: High-efficiency gas and propane furnaces that meet an Annual Fuel Use Efficiency (AFUE) of 95 or higher and gas, oil, or propane boilers and oil furnaces that meet an AFUE of 90 or higher.
- Air Conditioners & Heat Pumps: Central air conditioning units must meet the highest tier standards set by the Consortium for Energy Efficiency (CEE) as of January 1, 2009, which for most systems is a Seasonal Energy Efficiency Ratio (SEER) of 16.
- Biomass Stoves: Stoves must have a thermal efficiency of at least 75 percent, and be used to heat a dwelling unit or water for home use. The law defines biomass fuel as anything from agricultural crops, trees, wood wastes and residues to pellets, plants, grasses, and fibers.
- Fans: High-efficiency fans for heating and cooling systems that use no more than 2 percent of total heating system energy use, as defined by DOE test procedures.
- Water Heaters: Gas or propane water heaters that meet an Energy Factor (EF) of at least 0.82, or a thermal efficiency of at least 90%, and electric heat pump water heaters that meet an EF of at least 2.0.
Homeowners can also access several onsite renewable generation incentives for Solar Energy Systems, Small Wind Systems, and Geothermal Heat Pumps installed at their residence between January 1, 2008 and December 31, 2016. The incentive is for 30 percent of the cost of the system (equipment and labor).
Come tax time, to ensure that a project qualifies for tax credits, manufacturers need to certify that specific products are eligible. Homeowners should obtain a copy of this certification from the manufacturer, installer, or retailer when buying these products. Certifications don’t need to be submitted to the IRS, but should be kept on file in case the IRS has questions.
Homeowners should also keep records of when each eligible measure is installed and the cost of the system (including labor). To apply for these incentives, use the IRS Residential Energy Efficient Property Form 5695.
Estelle Rodis-Brown - Estelle is a freelance writer and public relations specialist, with a focus in aviation, air shows, outdoor recreation, fitness, green ...
