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Did you know that you can receive tax credits for a number of home improvements that increase the energy efficiency of your house?

Originally, these residential home improvement tax credits were set to expire in 2009.

Well, here’s some good news. These energy based tax credits have been extended through the end of 2010.

Energy Based Home Improvement Tax Credits

First established by congress and signed into law by President George Bush in 2005, the Energy Policy Act (EPACT) provides tax credits to individuals for a number of energy conservation home improvements.

The tax incentives offered are credits, not deductions. A tax deduction discounts the tax payer’s gross income which lowers the amount of income on which taxes must be paid.  A tax credit differs from a tax deduction by directly reducing the amount of taxes owed rather than decreasing gross income. Most homeowners regard tax credits as more beneficial.

These energy conservation credits were initially set to expire in different years, with the first expiration dates starting in 2009. The American Recovery and Reinvestment Act of 2009 has extended many of the consumer energy tax incentives through the end of 2010.

Remember, always consult your accountant or tax specialist first to fully understand the specific tax benefit you might receive. The current tax laws are subject to change, and these various tax credits are scheduled to expire at different times.

Many improvements that qualify an individual for the tax credit are Energy Star-certified. Energy Star ratings were created by the Environmental Protection Agency to inform consumers of the most efficient products. An Energy Star rating means that the improvement meets specific levels for energy efficiency in categories relevant to that product.

Tax Credits Reward You For Improving Home Energy Efficiency

Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes are eligible to receive a tax credit for 30% of the cost, not to exceed $1,500. The improvements have to be placed into service starting January 1, 2009, through December 31, 2010.  For more details, see EnergyStar.gov for a complete summary of energy efficiency tax credits available to consumers.

Keep in mind tax credit for roofs, insulation, doors and windows applies only to the cost of materials and not to installation costs.

Renewable Energy Tax Credits For Residential Applications

Another interesting category of tax credits that benefit consumers focuses around renewable energy.  Homeowners who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems can receive a 30% tax credit for systems placed in service before December 31, 2016.  The previous tax credit cap no longer applies.

Don’t Wait To Take Advantage of These Tax Incentives

While these tax incentive extensions are definitely good news, don’t delay. Tax laws and initiatives are always subject to change, and these energy conservation tax credits won’t remain available indefinitely.

It takes some time to do the proper planning and homework before you undertake these type of home improvement projects. So best to get started now. Many of these energy saving home improvements fall under the “home maintenance” category.

For example, if you’ve been in your home awhile, or you just moved into an older home, you may already be facing a roof replacement or repair in the next five years anyway. Why not take advantage of these tax credits now, and think about doing that roof work a little sooner?

How about those window upgrades you’ve been thinking about, but keep putting off? Today’s modern energy efficient windows not only save on your energy bill and improve the beauty and value of your home, if you get in now, you’ll also qualify for some significant tax saving credits.

Energy conservation home improvements create benefits in many ways

• Save you money on your energy bill
• Many qualify for tax credits and savings
• Improve the value of your home
• Green remodeling helps protect the environment

Not only can you feel good about improving your home, these energy conservation improvements fall under the growing “green home remodeling” trend, and that’s good for the environment.

But you need to act before these energy tax credits expire.

Contact Z.Z. Daily Construction if  you’d like to find out more about energy saving home improvements.

Tags: energy conservation, energy home improvements, green home remodeling, Green Remodeling, home remodel, home remodeling, renewable energy home improvements, tax deductible