Home improvement grants in the USA
The Energy Policy Act 2005 gives tax credits for energy saving home improvements as well as for solar installations and hybrid car purchases. The Alliance to Save Energy gives a comprehensive breakdown of the bill.
You can check out your home energy efficiency through the government site Energy Star, which is a partnership of the Environmental Protection Agency and the Department of Energy. The site also holds a lot of information on home improvements for energy efficiency.
Energy Home Improvements
The tax credit is for 10% of the improvement cost up to a maximum of $500 and are limited to your primary home. Eligible improvements are made between those made December 2005 and January 2008.
There are also a cap on credits allowable for certain types of improvement:
- $300 - Central air conditioner or heat pump
- $150 - Furnace or boiler
- $200 - Windows
- $500 - Insulation and sealing
Just insulating the attic, roof and crawl spaces can save 20% on energy bills for very little investment in time or money. Replacing appliances with modern varieties can also save considerably on energy consumption.
Energy Efficient Home
There is an annual maximum for energy efficient home credits up to $2,000pa for purchases made before January 2008. (Rather than a total maximum for the period as for energy improvements - as above.) These credits are available for both primary and secondary homes.
Energy efficient home credits are primarily for photovoltaic system installations, for which up to 30% of the cost can be claimed or up to $2,000 a year.
Another credit of up to $2,000 can be applied for active thermal solar system installations for your home water heating. Swimming pool or hot tub heating will not be eligible.
It is also possible to carry credits over, so for example if you spend $20,000 on a photovoltaic system in 2006 you can claim $2,000 credits in both 2006 and 2007.
Eligibility for purchase and home improvement tax credits is a complicated process as outlined in the energy bill. The IRS says that you can rely on the manufacturer to determine whether a product meets federal standards.
Make sure when you purchase items that are going to improve the energy efficiency of your property that you ask for certification that they are eligible for a tax credit. File the certification and purchase receipts with your tax records so that you or your accountant notice the tax break at the time of your annual returns.
There are home improvement tax credits offered by individual states also. Have a look at the excellent Database of State Incentives for Renewables & Efficiency (DSIRE)where benefits range from loans, to $1,000 tax credit in Oregon or property tax credits and rebates in Marin County.
Tax Credits are also available of $250 - $3,400 for individuals or businesses purchasing a new hybrid car or truck. The credit is available for vehicles placed in service after 31 December 2006 and purchased before end December 2010. The credit for each manufacturer will be phased out once they have sold 60,000 eligible vehicles. Toyota has already reached its limit of 60,000 - to check up the current status look at TIAP the Tax Incentives Assistance Project.
As for all your purchases, be sure to keep the certification and receipts with your tax records.