NDL Hearth Blog

Late last year, many homeowners were scrambling to get energy-efficient home improvements completed before those federal tax credits expired on Dec. 31. If you were one of those who didn't take advantage of last year's energy tax credits, you still may be able to get them this year thanks to the 2010 Tax Relief Act that has extended the tax credits for energy-efficient home improvements for 2011.

"The new 2011 tax credit is good for up to 10 percent of the amount paid or incurred by the homeowner for qualified energy efficiency improvements installed during the tax year, subject to a lifetime $500 maximum," said attorney Jonathan Goldberg.

Unfortunately, that's not as good as the 2009 and 2010 versions that had a 30 percent credit and lifetime maximum of $1,500.

Goldberg also said that if the homeowner received an energy tax credit in the past, it could mean they don't qualify this year. There are limits to the amount of credit you can qualify for depending on the product. Mark Ratliff at Hartford and Ratliff, said that even with the credits available, many customers have to do the math.

"The price of these qualifying products are usually higher than non-qualifying products. Customers need to weigh the longer-term payback versus the upfront costs. Unfortunately, many are not, therefore, they choose to forgo the more expensive model that qualifies and are buying a less expensive model that doesn't," Ratliff said.

In almost all cases the purchase of the energy saving product will pay for itself with the savings you obtain in home heating and energy bills. All Consumers should take that into account. For example, a new wood burning or pellet stove which qualifies for the tax credits will substantially decrease your home heating costs therefore reducing your energy bills and paying for itself within a year or two.

What energy-efficient home improvements are eligible? The overall $500 cap can be reached in several ways with the purchase and installation of energy-efficient products that meet certain efficiency criteria.

Some products that qualify include wood burning stoves and pellet stoves, exterior windows, storm windows, insulation, exterior doors, roofs, central air conditioners, furnaces, boilers, and water heaters. There are also separate credits for geothermal heat pump systems and certain solar applications.

The home improvement tax credit applies for improvements "placed in service" from Jan. 1, 2011, through Dec. 31, 2011. The IRS defines "placed in service" as when the products or materials are ready and available for use.

Always check with a tax professional to ensure you qualify for any of these federal tax credits. But if you didn't take advantage of last year's credits, there is a good chance you can still save some money on your taxes in 2011 and get some green by going green.

Original Article from Detroit News, Glenn Haege

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