Tax credits

According to the National Association of the Remodeling Industry (NARI) reported by Jessica Tobacmann:

To help the economy turn around; the federal government passed the American Recovery and Reinvestment Act of 2009 (The Economic Recovery Act) earlier this month. As our customers you will be pleased to learn that the list of tax credits for qualified energy-efficiency improvements has been expanded and that the deadline for applying for them has been extended through the end of 2010.  

In earlier years, tax credits were limited to 10 percent of the cost of each energy-saving product, with a lifetime cap of $500. Fortunately for homeowners, the current stimulus package has tripled the lifetime cap by up to 30 percent. To qualify, a product must be 15 percent to 20 percent more efficient than the standard model.

For our customers to take any tax credits for taxes in 2009, first, they have to complete IRS Form 5695 (Residential Energy Credits) and submit that as part of their 2009 income tax return, and they must retain certain information with their tax returns in case the IRS audits them. This information includes: the name and address of the manufacturer of the product; identification of the material; the make, model or other identifiers of the product; a statement that the product meets the Internal Revenue Code section 25C standards; a list of climate zones for which the criteria are satisfied; and a declaration that the certification statement about the product is true.   

To take advantage of the new credits, our customers must limit their spending to $2,000 for qualified solar electric property costs, $2,000 for qualified solar water heating property costs and $2,000 for qualified geothermal heat pump property costs, along with a total of $4,000 for small wind energy property costs and a limited amount of qualified fuel cell property costs, according to IRS Form 5695. Qualified solar electric property costs are for materials that use solar energy to produce electricity for your home. Qualified solar water heating property costs are for devices that are at least half-powered by the sun, and that heat water for your residential usage in the United States. Both of these credits are for costs related to solar panels, or other, similar items. Properties in this category must be endorsed by the nonprofit Solar Rating Certification Corporation, or a comparable group. Geothermal property uses energy from the earth to heat or cool your home. A small wind energy device creates electricity with a wind turbine. For a definition of fuel cells, please see IRS Form 5695.

The Recovery Act also includes a separate, non-business, or residential, energy property credit, for energy-saving items that homeowners began using at home in 2009. These items include high-efficiency heating and cooling systems, water heaters, windows, doors, and insulation, according to Form 5695. However, if the homeowner took tax credits for any of these items in 2006 or 2007, that will limit the amount of tax credits they can obtain now. They may be able to count any energy-saving improvements made in 2008 toward this credit. However, if homeowners use an item for residential purposes less than 80 percent of the time, then they can only use the costs related to home usage, as opposed to business usage, to determine the amount of the credit.

We at Putnam Windows have slightly modified this article to refer directly to you, our customer.

For the complete text of the stimulus package, please Click Here.