2011 tax credits help you have a greener home
Yippee! For the third year in a row, you can get federal tax credits (and more) for your green home building or remodeling.
Many people mistakenly believe the $2,000 federal tax credit for new, energy-efficient homes ended in 2010, but Congress extended the perks through December 31, 2011.
Here it is in a nut-shell:
- Home Renewable Energy Sources. Installing renewable energy systems – in either your principle or second home – can still qualify for a tax credit equal to 30% of costs with no maximum cap. These include solar water heating and/or solar electric (photovoltaic) power; Small wind systems; geothermal heat pumps; Micro-turbine systems.
- Buy energy-saving products. For new or existing principle homes, extended tax credits cover up to 10% of the improvement, up to $500. Here’s a sampling: windows (up to $200), oil or gas furnace and boilers to 95 percent efficiency (from $150-$200) and water heater and wood heating systems (up to $300).
- Manufacturer installation of energy-efficient appliances. For new or existing homes, get a manufacturers’ credit for highly efficient appliances designed to save energy above today’s average appliances.
Tax credits are more helpful than tax deductions because credits are directly subtracted from the amount of taxes owed. However, deductions only reduce the total amount of taxable income and thus a smaller percentage of the amount owed. For example a $1,000 tax credit applied to a $5,000 tax bill reduces the bill to $4,000; a $1,000 tax deduction, subtracted from the total taxable income, may only yield a $100 reduction in the overall tax bill, leaving the you owing $4,900.
Click the blue text for a summary of what’s included in the 2011 federal energy tax credit and how to get it.
Click the blue text for more details on your state for available renewable and energy efficient incentives.
Don’t forget about manufacturer rebates and special retail sales promotions (especially around holidays).
Here’s some fine print: Not all Energy Star qualified products qualify for a tax credit.
Owners who got these incentives in 2010 are not eligible for a repeat tax credit.
“Homes account for more than 20 percent of the global warming pollution in the United States.”, says Natural Resources Defense Council energy director David Goldstein, PhD, “Responsible energy action can achieve significant pollution reductions and tens of thousands of dollars in cost savings for each home.”
If you’ve been sitting on the fence about green home remodeling, you can lower your utility bills and reduce your dependence on foreign oil while improving your environment.
Your family deserves it, so go get your tax credits. Thoughts?
