Although there hasn’t been much hype surrounding these credits and deductions-all increased or expanded by federal stimulus bills passed this year and last year-retailers say sales of new, energy-efficient products are beating expectations in the midst of the recession.
The reason, they say, is the prices are that good.
Federal stimulus laws allow homeowners to get a tax credit of 30% of the cost of energy efficient windows, doors, water heaters, air conditioners and furnaces, up to a maximum of $1,500. So if you max out the credit on your new A/C, you can’t use it for one of the other items. But if you don’t use any or all of the credit this tax year, you can buy a qualifying item and claim the credit or any remaining credit in 2010, said Amy McAnarney, an executive director at H&R Block’s Tax Institute. The items have to be installed by Dec. 31, 2010, for taxpayers to claim the credit. McAnarney also cautioned buyers not to take a company’s word that an item qualifies. She said to get a copy of the manufacturer’s statement.
Another tax credit allows homeowners to get up to 30% of the cost of solar energy systems, such as solar water heating and solar power, small wind systems and geothermal heat pumps if they are installed by Dec. 31, 2016. It’s separate from the credit for windows, doors and air conditioners, so homeowners can use both.