$1500 tax credit

Under the stimulus legislation signed by President Obama on Feb, 17, 2009, tax credits for energy-efficient home improvements have been extended and increased significantly. That means that adding a new garage door in 2009 or 2010 can save you money by helping to lower home energy consumption and costs, AND it will help pay for itself this year through the tax credit incentive of 30%.

There are two formal classifications of Federal Energy Tax Credit:

1. Section 1121 - Residential Energy Property Credit - The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010. Following are types of projects covered under Section 1121:
   • Insulation
   • Energy efficient exterior windows
   • Energy-efficient heating and air conditioning systems
     
     
2. Section 1122 - Credit for Residential Energy Efficient Property - This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property. Following are types of projects covered under section 1122:
   • Solar electric. 30 percent of the qualified solar electric property expenditures made by the taxpayer during the taxable year;
   • Solar water heater. 30 percent of the qualified solar water heating property expenditures made by the taxpayer during the taxable year;
   • Fuel Cell Property: The lesser of-- 30 percent of the qualified fuel cell property expenditures made by the taxpayer during the taxable year; or $500 for each half kilowatt of capacity of the qualified fuel cell property to which the expenditures relate;
   • Geothermal Heat Pumps: 30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during the taxable year.
   • Wind Turbines: 30 percent of the qualified small wind energy property expenditures made by the taxpayer during the taxable year;
   • Labor Included

Section 25D allows the credit for expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of residential energy efficient property described in section 3.01 of this notice and for piping or wiring to interconnect such property to the dwelling unit.

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