You can still get a tax credit for home improvements, but most of them are about to expire (again).
Last year, Congress extended the tax credit for many energy-efficient home improvements through 2013. You can receive up to $500 in total tax credits for eligible home improvements you’ve made since 2006.
If you haven’t already claimed a credit of $500 or more for eligible home improvements, then you may be able to take the break before the end of the year. The improvements must be to your principal residence.
The size of the credit depends on the type of improvement.
The tax break applies to 10 percent of the purchase price (not installation costs) of certain insulation materials, energy-efficient windows ($200 limit for windows), external doors and skylights, metal roofs with pigmented coating, and asphalt roofs with cooling granules that meet certain Energy Star requirements.
You can count materials and labor costs for certain central air conditioners, biomass stoves, electric heat pumps and electric heat pump water heaters that meet specific energy-efficient guidelines — up to a maximum of $300 each. You can count up to $150 for an eligible natural gas, propane or oil furnace or water boiler.
The items must meet specific energy-efficient requirements to qualify. See the U.S. Environmental Protection Agency’s tax breaks site, the Alliance to Save Energy tax credit page and the Tax Incentives Assistance Project site for more information. Keep your receipts and the manufacturer’s certification of eligibility for your records.
Some alternative-energy improvements qualify for larger tax credits with a later deadline. You can take a credit worth 30 percent of the cost of buying and installing certain alternative-energy equipment, such as geothermal heat pumps, solar water heaters, solar panels, fuel cells and small wind-energy systems.
You must make these improvements by Dec. 31, 2016, and they aren’t subject to the $500 limit. See the Energy Star tax credit website for details on these credits.
You can claim these credits by filing IRS Form 5695, Residential Energy Credits, which also includes more details about these credits.
If you don’t qualify for the federal incentives, see if you can get any state tax breaks for energy-efficient home improvements.
For links to information about the programs in each state, see the American Council for an Energy-Efficient Economy site.
For a list of several state and utility programs, see the Tax Incentives Assistance Project site.
(Source: Chicago Tribune)