Thanks to economic stimulus provisions, you may be eligible for federal tax credits, which generally are more valuable than tax deductions. A deduction reduces taxable income based on your tax bracket, while a credit gives you 100% of the credit back and is not based on income.
Here's an example: If you're in the 35% tax bracket, a $1,000 deduction reduces your tax bill by $350, but a $1,000 tax credit reduces your tax bill by the full $1,000. You claim the credit when you file your federal income tax return.
Tax credits are available for 30% of the cost of these energy-efficient home improvements—up to $1,500, through 2010—for existing primary homes only:
- Energy-efficient furnace, air conditioner, heat pump, or boiler
- Insulation
- Skylights, storm windows, and doors
- Non-solar water heater
- Roofs (metal and asphalt)
- Biomass stoves
Tax credits are available for up to 30% of the cost of these energy-efficient improvements—with no maximum dollar amount, through 2016—for existing primary homes, new home construction, rentals, and secondary homes:
- Geothermal (ground-source) heat pump
- Solar panels
- Solar water heater
- Small wind energy system
For more details about energy-efficient improvements, tax credits, and qualifications, visit Alliance to Save Energy at ase.org, the Weatherization Source at weatherizationsource.com, and Energy Star at energystar.gov.
Call an LCU loan specialist at 800-649-4646 for information about loans to help you make these cost-effective improvements.
Copyright 2009 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.