Adding green technology into a home can help home owners save money in a long run but some green improvements are expensive and many home owners may not be able to afford the costly upfront investment.
Several tax credits are available to help home owners save on green updates.
Here are two main tax credits available for those interested in making energy efficient improvements to their homes:
1. Wind, Solar, Geothermal and Fuel Cell Tax Credit:
This tax credit is available for both existing homes and new construction. Home owners can receive a tax credit up to 30 percent off the cost of their improvements between Jan. 1 and Dec. 31 of this year. The following green updates qualify:
- Geothermal heat pumps
- solar panels
- solar water heaters
- small wind energy systems
- fuel cells.
2. Qualified Energy Efficiency Improvements:
This credit gives a 10 percent tax credit for purchases that were “placed in service” between Jan. 1 and Dec. 31, 2011.
According to the National Association of Home Builders: “The maximum credit for a taxpayer for all taxable years being $500, and no more than $200 of such credit may be attributable to expenditures on windows. This rule means that taxpayers who have claimed $500 or more of this tax credit in prior years, particularly 2009 and 2010, can no longer participate in the program.”
More about Tax Credits for Green Improvements in 2011: http://www.irs.gov/newsroom/article/0,,id=220989,00.html and IRS 5695 Tax Form in 2010 http://www.irs.gov/pub/irs-pdf/f5695.pdf
SOURCE: IRS, National Association of Home Builders
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