Even if you purchase multiple products, you may only receive a maximum of $1,500 in federal tax credits over the 2-year period (2009 & 2010). Basically, you can get back 30% on a single or multiple qualifying purchase(s) of up to $5,000 as a tax credit during this 2-year period. Products must be for your principal residence that you own and live in. If you receive the entire $1,500 credit in 2009, then you will not qualify for an additional credit in 2010.
Example: Two or more unmarried people living in the same home who own it jointly are each eligible for the tax credit on the amount of money they each individually spend to make home improvements - up to a maximum of $1,500 total for the home.
If Person A pays $3,000 towards new windows and Person B pays $2,000 towards the new windows, they have a combined total expenditure of $5,000 on new windows. Person A will get 3/5 of the $1,500 tax credit ($3000 = 3/5 of $5000) or $900. Person B will get 2/5 of the $1,500 tax credit ($2,000 = 2/5 of $5,000) or $600.
How can I get more than $1,500 in tax credits?
The $1,500 maximum does not apply to geothermal heat pumps, solar water heaters, solar panels, fuel cells or wind generators. These improvements are all eligible for a 30% tax credit with no upper limit. However, the tax credit for fuel cells is limited to $500 per .5 kW of power capacity. These tax credits with no upper limit are completely separate from the one limited to $1,500 - so you can get both. For example, you can get $1,500 back for new windows and $3,000 back for a new geothermal heat pump - for a total tax credit of $4,500.
Some other issues to consider are these are "non-refundable" tax credits so you can't get more back in tax credits than you pay in federal income tax and only the tax credits that are not limited to the $1,500 cap can be carried forward to future years
Which products are eligible for a tax credit for energy efficiency improvements?
- Windows and Doors (including sliding glass doors, garage doors, storm doors and storm windows)
- Insulation
- Roofs (Metal and Asphalt)
- HVAC: Central Air Conditioners, Air Source Heat Pumps, Furnaces and Boilers
- Water Heaters: Gas, Oil & Propane Water Heaters, Electric Heat Pump Water Heaters
- Biomass Stoves
Tax credits limited to $1,500 total for 2009 & 2010 are available ONLY for existing homes, NOT new construction, that are your "principal residence".
Tax credits at 30% of the cost with no upper limit through 2016 are available for existing homes & new construction - it does not have to be your "principal residence" (vacation homes are eligible) for:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
Source: www.energystar.gov
