You may not have been one of the lucky homeowners who qualify for aid under the new federal housing rescue plan; however, there still may be an avenue to get Uncle Sam to help foot the bill via energy efficient upgrades to your home! Included as part of the Emergency Economic Stabilization Act of 2008 and the Stimulus Bill, is a return of tax credits for energy efficient improvements to your home.

The new credits are in many cases more lucrative than the old ones which expired in 2007 (30 percent credit vs. old 10 percent credit). The new credits are available for projects such as insulation, doors, windows, roofs, air conditioning and water heaters. Of course, the devil is in the details, and the guidelines on which type of upgrades apply for the tax credits can be a little tricky. Many of the credits are geared more towards cold weather states so you’ll have to do your homework before starting the upgrades. Below is a recap of the main credits, but if you’re interested in the complete list of qualifying products visit www.energystar.gov for more details. The IRS is still working on issuing final guidelines so double check before starting your project!

Major Credits through December 31, 2010

$1,500 is the total maximum credit which can be taken for products placed in service in year 2009 and 2010. Meaning you may want to pick one project with the most urgent need for an upgrade.

1.) Insulation - Primary purpose must be to insulate (no siding), 30 percent of cost up to $1,500.

2.) Exterior Doors and Windows - 30 percent of cost up to $1,500 each for exterior windows and doors. Being a warm weather state it’s harder for Florida to qualify on these items so make sure the cost/benefit is worth the investment.

3.) Energy Star qualified Metal and Asphalt Roofs - 30 percent of cost up to $1,500 available, must be Energy Star qualified.

4.) HVAC - Some Central A/C, Heat Pumps, Gas Furnace, etc. systems qualify for a credit of 30 percent of cost up to $1,500. Once again, check the guidelines very carefully to see which products qualify.

Major Credits through December 31, 2016

There is no dollar cap on the credit taken for the products listed below.

5.) Solar water-heating system - 30 percent of cost. Most Americans spend hundreds of dollars a year heating water for their homes and this is a great savings. There is no credit for for swimming pools or hot tubs however. To qualify, the system must be certified by the SRCC (Solar Rating and Certification Corporation)

6.) Photovoltaic System - For those ready to step up the gain on going green, a 30 percent of cost credit is available for these systems which provide electricity to a residence. Many of these systems can cost 30 to 40 thousand dollars so the credit could be sizable.

7.) Small Wind Energy System - And for the truly adventurous, there is a 30 percent of cost credit for a residential wind energy system (aka a windmill). Checking with your HOA first might be a good idea here!

As stated earlier, make sure you do your homework before starting a home improvement project in which you plan on taking a tax credit. Getting Uncle Sam to help foot the bill for an energy efficient upgrade is a great way to go “green” and save a little green in the process!

Barrett Haus provides independent (through his own companies) financial and tax advising for businesses and individuals. He can be reached at 407-222-5120 or barrett@hausfinancial.com. Visit www.hausfinancial.com to learn more.

Article by Barrett Haus