On February 17th, 2009 President Barack Obama signed into law the American Recovery and Reinvestment Tax Act of 2009. It extends tax credits for certain energy efficient additions or replacements in existing homes only. Be aware that the maximum amount of homeowner credit for ALL improvements combined is $1,500, during 2009 and 2010. Following is a list of items that qualify:
- Windows and Doors
- Insulation
- Roofs (either metal or asphalt)
- HVAC
- Water Heaters
- Biomass Stoves
For the following items through the year 2016 on existing homes as well as new construction, tax credits are available at 30% of the cost with no limit:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Systems
- Fuel Cells
For the Tax Year 2008, the only energy efficiency improvements eligible for tax credit are:
- Geothermal Heat Pumps – 30%, up to $2,000
- Solar Water Heaters – 30% up to $2,000
- Solar Panels – 30% up to $2,000
- Small Wind Energy Systems – 30% up to $4,000
- Fuel Cells – 30% up to $1,500 per .5kW of power capacity
To claim this credit you must file IRS Tax Form 5695 with your 2008 taxes.
Breaking Down the First Time Home Buyer Tax Credit
There is no doubt that the first time home buyer tax credit is a great thing but there are a few things to know before you assume that you qualify for the full $8,000. The tax credit breaks down as follows:
Who qualifies? First time home buyers and people (or spouses) who have not owned a home for the previous 3 years. You must purchase your home between January 1, 2009 and December 1, 2009.
The tax credit is a real boon for first time home buyers and does not have to be repaid. If you qualify for the tax credit and have been considering purchasing a new home there could not be a better time. Low interest rates, low home values and the first time home buyer tax credit all add up to the right time to call an experienced local Realtor.
Resource and for more information: Realtor.org