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Home Ownership
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LIGHT TURNS GREEN ON TAX CREDIT FOR ENERGY EFFICIENT HOME IMPROVEMENTS

Four years ago, Congress passed the Energy Tax Incentives Act of 2005. A provision of that Act established a $500 tax credit for energy efficient improvements made to your primary residence.

The pre-2008 rules allowed you to claim a tax credit equal to 10% of the money spent on the installation of certain energy efficient improvements to your principal residence including insulation and exterior windows, doors, and skylights. You could also take a tax credit for "qualified energy property" including up to $50 spent on circulating fans, $150 on furnaces or hot water boilers, and $300 on heat pumps, water heaters, and central air conditioning.

The credit only applied for purchases made during 2006 and 2007, and was limited to a lifetime max of $500 per dwelling, with no more than $200 of the credit to be taken for replacement windows. While other tax breaks included in the Energy Tax Incentives Act of 2005 were subsequently extended, this tax credit expired as originally planned on December 31, 2007.

Renewed and Improved:

The American Recovery and Reinvestment Act of 2009 reinstated and improved this tax credit for two years beginning on January 1, 2009 as follows:

Tripled the rate of the credit - from 10% to 30% for 2009 and 2010.

Tripled the maximum credit - up to $1,500 per dwelling for qualified expenditures made during 2009 and 2010.

Eliminated the cap of $50 to $300 on items such as circulating fans, furnaces, hot water boilers, heat pumps, water heaters, and central air conditioning.

Eliminated the $200 cap on the portion of the tax credit applicable to the installation of energy efficient windows.

Zip Code: 01801