Ask Kim
Tax Breaks for Winterizing Your Home
Uncle Sam will help cover the cost of energy-efficient windows, doors and more.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
December 3, 2009
Can I get a tax break for winterizing my home this year?
Yes, you can. In fact, the federal tax credit for energy-efficient home improvements was expanded for 2009 and 2010 to cover many more categories than in the past. So winterizing your home will not only help you save on energy costs now but also save you money when you pay your taxes next spring.
The credit is worth 30% of the cost of qualifying energy-efficient windows, skylights, doors and roofs, plus certain types of insulation, up to $1,500, for 2009 and 2010 combined (installation costs for the improvements do not count). So if you spend up to $5,000 on any of these qualifying expenses to winterize your home before December 31, you could lower your 2009 tax bill by as much as $1,500. The cost of purchasing -- and installing -- certain high-efficiency heating and air-conditioning systems, water heaters and stoves that burn biomass qualify for the credit, too.
You don’t have to itemize to get the credit. But you will need to submit Form 5695 when you file your taxes.
You can get an even bigger tax break for big-ticket home improvements, such as the cost to purchase and install a geothermal heat pump, solar water heater, solar panels, fuel cells or small wind-energy system (as long as no part of the system is used to heat a swimming pool or hot tub). You get the same credit worth 30% of the cost of the improvements, but there is no maximum dollar amount.
See The Tax Incentives Assistance Project and the Environmental Protection Agency’s Energy Star Web site for more information.
Got a Question? E-mail me at askkim@kiplinger.com.
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Reader Comments (3)
Posted by: Jon Newcomb at 12/05/2009 09:44:01 AM
Kim, is there an easy to understand tax changes for individuals 2008 vs 2009? This would include deductions, tax rates, green purchases, AMT, etc. Thank you.
Posted by: Kim Lankford at 12/17/2009 07:28:13 AM
Hi Jon, this is Kim Lankford, author of the article. The new tax credit for energy-efficient home improvements is much better than the old version. In 2006 and 2007, you could take a tax credit for 10% of the cost of installing energy-efficient windows, doors, skylights, and certain kind of roofs. The maximum credit was $500, and only $200 of that could be for replacement windows. That credit was not renewed in 2008. But the version for 2009 and 2010 expands the credit -- now you can get a credit for up to 30% of the cost of qualifying energy-efficient windows, skylights, doors, roofs, and certain kinds of insulation, up to a maximum of $1,500 over that two-year period. And there are no longer dollar limits for certain kinds of improvements within that maximum, as there had been for windows in the past. Also, even if you had already taken the $500 credit in 2006 or 2007, you can still qualify for up to $1,500 in credits for energy-efficient home improvements made in 2009 and 2010. My colleague, Mary Beth Franklin, wrote a great Tax Tips column a few weeks ago that goes into more detail about how the new credit is different from the old versions (including some information about the credit and the AMT). See It Pays to Go Green at http://www.kiplinger.com/columns/taxtips/archive/it-pays-to-go-green.html
Posted by: Barbara at 01/09/2010 07:18:11 AM
Kim, I see a licenced nutrition specialist, my question is ; Can I deduct the nutrition pills I buy from this nutrition specialist from my income tax?