Ramsey County

Making $ense of Dollars and Cents

June 22, 2009

Tax Credit for Saving Energy

          Right now winter home heating bill seem a long ways off, but summer and fall are exactly the time to think about energy efficiency.

          Replacing inefficient windows and doors, heating and cooling equipment and insulation can decrease energy bills and make a home more comfortable. With the federal tax credits and utility company energy rebates, the benefits go beyond lower utility bills. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes in federal taxes.

          Besides the decrease in energy bills, tax credits will help pay for the new products. Some local utility companies also offer energy rebates for becoming more energy efficient.

          The Stimulus Bill (American Recovery and Reinvestment Act of 2009) made significant changes to energy efficiency tax credits.  Check the government web site of:  “http://www.energystar.gov/taxcredits” for a list of improvements and specific products that qualify for the tax credit.

          In general the energy tax credits:  

          - Are available at 30 percent of the cost, up to $1,500 for property placed in service in 2009 and 2010 for existing homes, for windows and doors, insulation, roofs, HVAC, and water heaters.

          - Are available at 30 percent of the cost, with no upper limit through 2016  in existing and new construction, for geothermal heat pumps, solar panels, solar water heaters, small wind energy systems and fuel cells placed in service.

          Check the specifics before purchasing products, to ensure you are eligible for the tax credit.  Some products, furnaces, must be a specific make and model to qualify for the tax credit.  Installation of some products is covered under the credit, but not all. Homeowners should refer to the chart on the Energy Star page and follow the links to product specifications and details.

          To receive the credit, taxpayers must complete a 2009 IRS Form 5695 (which the IRS says will be available late in 2009).  Until then keep the product receipt and the Manufacturer's Certification Statement, a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit, with other tax records.

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524 4th Ave NE #5, 2nd Floor Ramsey County Courthouse
Devils Lake  ND  58301
701-662-7027
email - NDSU.Ramsey.Extension@ndsu.edu