As we head into Q4 2009 you might want to look at if you need to get some tax credits on your 2009 tax returns. ENERGY STAR appliances, spray foam insulation, ENERGY STAR windows, metal roofs, and more, there are opportunites for you to use the government’s money to upgrade your home this year.
What is a tax credit? You don’t receive an income tax credit when you buy the product, like an instant rebate. You claim the credit on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay.
Tax credits vs. tax deductions: In general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions – such as those for home mortgages and charitable giving – lower your taxable income. If you are in the highest 35-percent tax bracket, the income tax you pay is reduced by 35 percent of the value of a tax deduction. But a tax credit reduces your federal income tax by 100 percent of the amount of the credit.
This list is for any product INSTALLED in 2009 will be eligible for your 2009 return. Our list is for deductions for Rhode Island and Federal taxes. To find out about rebates in your state, check out the DSIRE website. The ENERGY STAR website also provides great information about Federal rebates. Continue after the jump to get a list of state and federal tax credits.
Rhode Island Tax Credits
Solar Water Heat, Solar Space Heat, Photovoltaic, Wind, Geothermal Heat Pumps : Amount: 25% of installed cost including labor and materials
Renewable Energy Sales Tax Exemption: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Photovoltaic, Wind, Geothermal Heat Pumps, Solar Pool Heating: 100% Exemption
Appliance and Equipment Efficiency Standards: Credit amount is based on the product. Proper manufacturer certification will be needed to claim this credit
Local Option – Property Tax Exemption for Renewable Energy Systems for Solar Water Heat, Solar Space Heat, Photovoltaic, Wind, Biomass, Small Hydroelectric
Federal Tax Credits – visit the ENERGY STAR website for qualifying factors for each credit
Windows & Doors : 10% of cost, up to $200 for all windows, skylights, and storm windows and 10% of cost, up to $500 for exterior and storm doors
Roofing: 10% of cost, up to $500 for metal and asphalt roofs
Insulation: 10% of cost, up to $5000
HVAC: $300 for Central AC, $300 for Air Source Heat Pumps, $150 for Gas, Oil, Propane Furnace or Hot Water Boiler
Geothermal System: Geothermal (or ground-source) heat pumps placed in service starting in 2009 are now eligible for a tax credit for 30 percent of the cost, with no maximum. These credits are effective through December 21, 2016. In order to be eligible for the tax credit, geothermal heat pumps must meet Energy Star criteria.
Water Heaters: $300 for gas, oil, propane water heater
Biomass Stoves: $300
Solar Energy Systems: 30% of the cost up to $2,000 for solar water heating, 30% of the cost for photovoltaic systems ($2,000 cap no longer applies)
Small Wind Energy Systems: 30% of the cost, up to $500 per half kW of capacity (not to exceed $4,000)
Fuel Cells: 30% of the cost, up to $1,500 per half kW of power capacity
For our house project this is the list of tax credits we will be able to apply to our 2009 taxes:
1. Windows/Doors: $200 for our Pella Windows and $500 for our doors = $700
2. Our DaVinci composite slate roof = $500
3. Our spray foam insulation from Atlas = $500
4. Our Geothermal Heat and AC System = $1750 state (max) and approximately 30% of our cost which looks to be totalling around $100k, so that is $33k in tax credits we get to apply in coming years.
5. We get $500 for an ENERGY STAR appliance.
Considering we owe on our taxes annually this is a significant benefit to us. There’s money on the table for everyone right now, and you still have three months to have systems and products installed, so take advantage!
Posted by: KDL | follow me on Twitter: newscaster
Filed under: Green, Saving Money | Tagged: geothermal tax incentives, Narragansett LEED Home, RI LEED home, Saving Money, Tax Credits | Leave a comment »