how to get tax credits for green remodeling
how to get tax credits for green remodeling

How to get tax credits for green remodeling

The American Recovery and Reinvestment Act of 2009 is full of initiatives that President Obama and Congress are hoping will boost our economy. At 1588 pages, most people probably wouldn’t take the time to read the whole thing, but there are some tax credits they might be missing out on. The economic stimulus package lengthens the Energy Efficiency Tax Incentives first enacted in 2005 and even creates some new ones for those who remodel their homes using more energy efficient and eco-friendly materials.

Homeowners can receive tax credits for installing efficient air conditioners and heat pumps; gas or oil furnaces and furnace fans; and gas, oil, or electric heat pump water heaters in new or existing homes. They can also get credits for energy improvements to their homes, such as windows, insulation, and envelope and duct sealing.

Here is a list of the modifications homeowners can make to receive these credits:

Adding insulation to walls, ceilings, or other part of the building envelope that meets the 2009 International Energy Conservation Code (and supplements) specifications (IECC).
Replacing windows and skylights, and exterior doors which are equal to or below a 0.30 U factor and a Solar Heat Gain Coefficient (SHGC) of 0.30.
Sealing cracks in the building shell and ducts to reduce infiltration and heat loss – these should be sealed so as to be consistent with the 2009 IECC.
Installing window films certified by the manufacturer to meet the requirements of a “qualifying insulation system.”

Installing a pigmented metal roof, or an asphalt roof with cooling granules that meet Energy Star requirements.

Installing an HVAC system meeting various specs depending on type of system.

In some cases, taking these measures will not only help you save energy and money, but your health may benefit as well. For example, most homes built before 1980 contain asbestos–widely used for insulation due to its fire-resistant qualities. Unfortunately, exposure to asbestos is the only known cause of mesothelioma, a rare type of cancer that usually forms in the lining of the lungs. It is very difficult to treat effectively because symptoms don’t usually show up until about 15 to 25 years after exposure. The available tax credits give you the opportunity to install alternative types of insulation that can be used instead of asbestos and don’t pose any danger to your health.

The tax credits apply for upgrades placed in service between January 1, 2009 and December 31, 2010. The credit is usually 30% of cost, up to $1500. Heating and energy systems relying on renewable energy (wind, solar, biomass) are exempt from the $1500 cap (meaning you get a credit of 30% of cost regardless of final total amount) and you have until 2016 to place them in service.

It’s important to do your research and work with a contractor that is familiar with the various building material specs, so that you can be well-informed about what is best to use to meet the federal tax credit requirements. Be sure to keep very careful documentation of type of material, costs, receipts, and manufacturer certification statements, so that come tax time you are able to prove your eligibility for the tax credits.


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