Tax Savings for Fixing up the House
Monday November 17, 2008
Here's some ideas for fixing up your house and saving on taxes at the same time. Congress renewed the energy-efficient tax credit for 2009 as part of the Emergency Economic Stabilization Act. That means taxpayers now have two additional years to make energy-efficient improvements to their homes and claim a tax credit. Improvements such as installing new windows, installing certain types of HVAC systems, and switching over to geothermal, biomass, or wind-powered systems all count towards the credit.
A full list of all energy-efficient equipment and their qualifications can be found at the Energy Star Web site.
Correction: as two readers point out in the comments, the credit is not available for 2008. The Energy Star web site also highlights this fact, stating that "improvements made during 2008 are not eligible for a tax credit." That means this credit would be great for planning ahead for 2009, but isn't available for 2008.
Comments
One caution…the credit skips 2008, expired 12/31/2007 and returns 01/01/2009. So anything done in 2008, there isn’t a credit for. See Emergency Economic Stabilization Act, Code Sec. 25C residential
energy property credit for property
placed in service in 2009.
Patty is correct–No credit for 2008, but it returns in 2009. And in 2009 it will be good for AMT as well.
Patty and Joseph, thanks for the heads-up on this. I had thought the credit was merely extended. But now I see it was renewed for 2009.
I don’t make enough money to pay taxes ..I live off Social Security…I own my home and I was thinking of installing windows, how would I benefit from the energy tax credit or would I ?
George, the tax credit for energy-efficient home repairs is a non-refundable credit. Meaning, the credit can be used to reduce your income tax liability, but not below zero. Once you reach zero tax liability, any excess tax credits are lost and cannot be refunded. There’s very few refundable credits (the additional child tax credit and the earned income credit come to mind). And some credits can be carried over to future years (like the adoption credit). But the home repair credit is both non-refundable and has no carryovers.
In 2008 I had new windows, new roof, new siding and a new hot water heater installed in my home. Is there anything that can be done so I can receive some tax credit or am I just out of luck cause all the work was completed in 2008.
If I had a new heater/air conditioner installed in October 08 but I am deferred payment until April 2010 can I get the tax credit if I pay it off in 2009?