Tax Credits Available for Energy Efficiency Improvements

Making energy efficiency home improvements in 2009 and 2010 may earn you valuable federal tax credits. Adding insulation, installing efficient windows and replacing your old energy hog of a furnace with a new, efficient one will help you save money on your utility bills and may leave up to $1,500 in your wallet when the tax man comes calling.

Qualifying for the tax credit takes a little research and organization. One of your first steps should be to read about the incentives at www.EnergyStar.gov/TaxCredits. You'll learn about the types of products that are eligible for the tax credit, the amount of the credit, and what qualifying criteria you must meet to take advantage of the incentive. When making the improvements, be sure to keep your receipts and manufacturer certification, as required by the IRS.

A key phrase in qualifying for the tax credit is "placed in service." It's not enough to just make the purchase in 2009 or 2010; the equipment needs to be installed and ready to use by the IRS-defined dates. Consult your personal accountant or tax advisor before making any home improvement investment related to tax credits.