Homeowners can take advantage of residential tax credits on their tax returns from either 2009 or 2010.
That's according to South Dakota Cooperative Extension Family Resource Management Specialist Liz Gorham, who said that as part of the American Recovery and Reinvestment Act of 2009, the tax credits are still available. "There is still time to make some energy efficiency improvements to save money on heating your home," said Gorham.
"Think about making some energy saving improvements to your home such as adding more insulation, new windows or doors, or a more-efficient furnace. If you take some energy-saving steps now, they could lead to bigger tax savings next year." Gorham said tax credits for homeowners who make energy efficient improvements to their property have increased.
"The IRS qualifications for claiming non-business energy property credits include a new law that increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined," Gorham said. "The credit applies to improvements such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems."
To qualify as "energy efficient" for purposes of this tax credit, products generally must meet standards that are higher than those that fit into a similar tax-credit available in 2007, Gorham said. "Manufacturers must certify that their products meet new standards and they must provide a written statement to the taxpayer such as with the packaging of the product or in a printable format on the manufacturers' website," Gorham said.
"The qualifying improvements must be placed into service after Dec. 31, 2008, and before Jan. 1, 2011." Gorham added that the improvements must be made to the taxpayer's principal residence located in the United States, and that to claim the credit, homeowners must attach Form 5695, Residential Energy Credits. The form is available at this link: http://www.irs.gov/pub/irs-pdf/f5695.pdf. It should be included with either the 2009 or 2010 tax return.
Taxpayers must claim the credit on the tax return for the year that the improvements are made. "Be a wise consumer and plan now to take advantage of tax savings in addition to enjoying the energy efficient home improvements you plan to make during 2010," Gorham said. "There is more information on this and other key tax provisions of the Recovery Act online at this link: http://www.IRS.gov/recovery." For other information, call Gorham, 605-688-4035, or e-mail her at this address: Elizabeth.Gorham@sdstate.edu.