IRS reminds homeowners about new energy credits to help "winterize" your home

Two expanded home energy credits are available to help homeowners lower both their winter heating bills as well as their 2009 tax bill, the IRS is reminding taxpayers. The nonbusiness energy property credit and the resident energy efficiency property credit can both be claimed by eligible homeowners when filing their 2009 federal income tax return. The credits are available when you itemize your deductions or take the standard deduction.

Nonbusiness energy property credit

The nonbusiness energy property tax credit equals 30 percent of a homeowner’s expenses on eligible energy-saving improvements, up to $1,500 for the combined 2009 and 2010 tax years. Expenses that can qualify for the credit include certain high-efficiency heating and air conditioning systems, water heaters, and stoves that burn biomass. Labor costs associated with the installation of these items also qualify as expenses eligible for the credit. Additionally, the costs of energy-efficient windows, skylights and doors, as well as qualifying insulation and certain roofs are also eligible for the credit. However, the costs of installing these items do not qualify.

Residential energy property credit

The residential energy property credit equals 30 percent of qualifying property expenses. There is no cap on the amount of the credit available, except for fuel cell property. Property that qualifies for the credit includes electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cells. Generally, the credit covers labor costs as well. The credit is available until 2016.

IR-2009-98