Tax credits for improving your home's efficiency

Big incentives for Bloomington homeowners

The U.S. Department of Energy's Energy Star website contains information on tax credits available for up to $1,500 toward the cost of energy-efficient home improvements. The credits are available to owners who use the house as their primary residence. There is no income cap.

The Department of Energy site says that the following improvements are eligible for a tax credit:

• Energy-efficient windows and exterior doors.
• Insulation.
• Energy-efficient metal or asphalt roofs.
• Energy-efficient furnace, air conditioner, heat pump, or boiler.
• Energy-efficient water heater.

In addition, the site lists tax credits that are available for up to 30% of the cost of these energy-efficient improvements, through 2016:

• Geothermal heat pump.
• Solar panels.
• Solar water heater.
• Small wind energy system.

Bloomington homeowners should investigate new federal income tax breaks that provide a big incentive for homeowners to quit procrastinating and invest in energy improvements for their home. You could raise your comfort level, lower your energy bills and get a credit up to $1,500 by installing insulation, replacing leaky windows and doors, and replacing an old furnace or air conditioner with energy-efficient models. Only improvements to your primary residence qualify for the credits.

There are no income caps or phase-outs, so 22,000 Bloomington homeowners are eligible for this credit. If every Bloomington owner took advantage of this incentive, it would be equal to a federal investment of $33 million in Bloomington.

Here's a summary of what's available:

• An income tax credit for 30% of the cost of energy-efficient doors and windows, insulation, air conditioners, furnaces, heat pumps and boilers, up to a lifetime cap of $1,500. This credit is available for improvements put into service during 2009 or 2010.
• For windows, doors, insulation and other similar projects that tighten up the "envelope" of your house, the credit applies to the cost of materials. However, if you buy a new air conditioner, furnace, heat pump or boiler that meets the energy-efficient guidelines, the cost of installation can be included when calculating the credit.
• There are extended tax credits for projects such as solar water heaters, geothermal heat pumps and wind energy systems. Homeowners who install these more complex systems are eligible for a tax credit of up to 30% of the cost of labor and materials, with no caps. The extended tax credits for complex systems are available through 2016.

Source: www.energystar.gov

For more information about eligible energy-efficient home improvements, visit:

• Alliance to Save Energy's website.
• Informational page on the Energy Star website.

For information on City electrical, plumbing, mechanical and building permits for this type of home improvement, call the Building and Inspections Division at 952-563-8930. Information about is also available via this Building and Inspections slide show on our website.

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