January 26, 2010

How to Get a Tax Credit for Remodeling Your Home

by: Taz Loomans

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Now that tax season is around the corner, here’s some information on what products are eligible for Tax credits under the ‘Stimulus Bill’ or The American Recovery and Reinvestment Act of 2009:

Tax credits are available at 30% of the cost, up to $1,500 total, in 2009 & 2010 (ONLY for existing homes, NOT new construction, that are your “principal residence”) for:

Windows and Doors (including Skylights)

  • From June 1, 2009 – December 31, 2010 windows (and doors and skylights) must
    have a U-factor and Solar Heat Gain Coefficient (SHGC) less than or equal to

  • You do not have to replace all the
    windows/doors/skylights in your home to qualify. And it doesn’t need to be a
    replacement either – installing a new window where there wasn’t one previously
    (like in an addition) would qualify.

  • For windows and skylights purchased before
    June 1, 2009, homeowners may use either ENERGY STAR labels or manufacturer
    certification statements to document eligibility for the tax credit. Doors are
    required to have a manufacturer certification statement.

  • For windows and skylights purchased on or
    after June 1, 2009, homeowners must obtain a manufacturer certification
    statement to document window, door, or skylight eligibility for the tax credit.
    If the retailer or installer cannot provide this document, it may be available
    on the manufacturer’s Web site.


  • Typical bulk insulation products can qualify,
    such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and

  • Products that air seal (reduce air leaks)
    can also qualify, as long as they come with a Manufacturers Certification
    Statement, including: weather stripping,
    spray foam in a can, designed to air seal, caulk designed to air seal,
    house wrap

  • For insulation to qualify, its primary purpose
    must be to insulate (example: insulated siding does not qualify). It must also
    have a Manufacturer’s Certification Statement to qualify


  • Metal roofs with appropriate
    pigmented coatings and asphalt roofs with appropriate cooling granules that
    also meet ENERGY STAR requirements are eligible.

  • Roof coatings are NOT eligible for the tax

  • The roofs that are eligible are
    “reflective roofs.”

  • To claim the tax credit for insulation
    installed in 2009, you will need to file the 2009 IRS Form 5695 and submit it
    with your 2009 taxes.

Central Air Conditioners

  • Split Systems must be: SEER >= 16 & EER >=13

  • Package systems must be: SEER >= 14 & EER >=

  • It is likely that you will have to replace
    your furnace as well toget an air conditioner that qualifies

  • The new air conditioner does not have to be
    replacing an old one to qualify.
  • To verify tax credit eligibility, ask your
    HVAC contractor to provide the Manufacturer’s Certification Statement for the
    equipment you plan to purchase. Or search the Manufacturer’s website.

Air Source Heat Pumps

  • Split Systems must be: HSPF >= 8.5, EER >= 12.5,
    SEER >= 15
  • Package Systems must be: HSPF >= 8, EER >= 12,
    SEER >= 14


  • Natural Gas or Propane Furnaces must have an
    AFUE of 95 or greater

Gas, Oil and Propane Water

  • Must have an Energy Factor of at least .82 OR
    a thermal efficiency of at least 90%

  • There are NO residential storage tank water
    heaters that can qualify for the tax credit because none can meet the Energy
    Factor requirement of .82

  • For a partial list of tankless water heaters
    that qualify for the tax credit: go to the Air-Conditioning, Heating,
    Refrigeration Institute

Electric Heat Pump Water Heaters

Biomass Stoves

  • The stoves must be used for heat or
    water heating and have a thermal efficiency rating of at least 75% as measured
    using a lower heating value.

  • The law defines “biomass
    fuel” as any plant-derived fuel available on a renewable or recurring
    basis, including agricultural crops and trees, wood and wood waste and residues
    (including wood pellets), plant (including aquatic plants), grasses, residues,
    and fibers.

  • To verify tax credit eligibility, make sure
    you get a Manufacturer’s Certification Statement

To claim the tax credit for any of the qualified products listed above installed in 2009, you will need to
file the 2009 IRS Form 5695 and submit it with your 2009 taxes.

For more information on federal tax credits for consumer energy efficiency, visit the EnergyStar

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